The Petroleum and Natural Gas Regulatory Board of India recently issued a public notice seeking feedback on a proposal to classify the aviation turbine fuel pipelines operated by Bharat Petroleum and Indian Oil as "common carriers".
This move aims to address the lack of competition in the airport fuel market, which has been dominated by a few oil companies controlling the pipelines.
By designating these pipelines as common carriers, the PNGRB hopes to encourage more competition, potentially reducing costs for airlines and ultimately benefiting consumers.
Benefits Of The Proposed Pipeline System
The PNGRB has emphasized that classifying ATF pipelines as common carriers would provide equal access to both established and new fuel marketers.
This change is expected to enhance competition in the market, potentially leading to better pricing of the ATF. Airline companies such as Interglobe Aviation Ltd. and SpiceJet Ltd. are likely to benefit from these improved pricing conditions as ATF costs account for around 35% of the total company expenses.
This proposal also comes at a time when ATF prices are seeing a downtick.
The PNGRB also pointed out that adopting a common carrier system for ATF pipelines could have environmental and logistical advantages. It is anticipated to lower carbon emissions associated with ATF supply and ensure a steady, reliable fuel supply at airports.
Additionally, the system could reduce transportation and logistics costs, benefiting various stakeholders, including airport operators like Adani Enterprises and GMR Infrastructure, and ultimately providing advantages to air passengers.
About the Public Notice
The latest notices filed by the PNGRB were pertaining to the following ATF pipelines:
Bharat Petroleum's Kochi Refinery to Kochi Airport ATF pipeline.
Indian Oil's Lucknow ATF pipeline connecting to Chaudhary Charan Singh International Airport.
Indian Oil's Kolkata ATF pipeline connecting to Chandra Bose International Airport.
Indian Oil's Panipat-Bijwasan-IGI Delhi Airport ATF pipelines.
Indian Oil's Chennai Meenambakkam ATF pipeline connecting to Chennai International Airport.
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