Reliance Industries Ltd, a major player in India’s energy sector, is making strides to secure access to essential infrastructure for fuel distribution, particularly in the aviation sector. The company’s ambition is to bolster its presence in the lucrative aviation turbine fuel (ATF) market, which is pivotal for servicing some of Asia’s busiest airports.
In its bid to capture a larger share of the ATF trade, Reliance has expressed interest in leveraging the pipeline networks and storage facilities established by public sector oil companies over the years. These facilities, primarily owned by entities such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), currently dominate the supply chain for aviation fuel across the country.
Reliance, which contributes significantly to India’s ATF production, is eyeing access to storage depots outside key airports like Delhi, Mumbai, Bengaluru, and Hyderabad. By tapping into these critical nodes, Reliance aims to enhance its supply capabilities and compete more effectively with state-owned firms.
The proposal, articulated in response to the Petroleum and Natural Gas Regulatory Board’s (PNGRB) draft regulation, advocates for a more inclusive approach to ATF supply. Reliance contends that granting third-party access to pipelines and associated storage facilities would foster competition and drive down fuel costs, benefitting both airlines and consumers.
India’s burgeoning aviation sector, marked by double-digit growth in ATF demand, presents a lucrative opportunity for market expansion. However, existing infrastructure limitations, including restricted access to pipelines and storage, pose challenges for private players like Reliance.
At the heart of Reliance’s proposition lies the call for equitable access to critical infrastructure. The company emphasizes the need for common carrier status for off-site storage facilities, facilitating smoother distribution of ATF to airport terminals. Additionally, Reliance advocates for the conversion of existing pipelines into common carrier networks, ensuring fair access to all stakeholders.
While Reliance’s endeavor aligns with PNGRB’s vision to enhance competitiveness and reduce logistical inefficiencies in the fuel supply chain, it faces resistance from public sector entities. The debate revolves around the designation of pipelines as common carriers, with PSUs showing reluctance to extend this status to existing infrastructure designed for captive use.
As stakeholders deliberate on the regulatory framework, the industry anticipates transformative changes that could redefine the dynamics of India’s aviation fuel market. With Reliance’s proactive stance and regulatory support, the stage is set for a paradigm shift towards a more inclusive and competitive landscape in the fuel sector.
