Advocating open ATF pipelines at airports, oil regulator urges

29 Feb 2024 CW Team

The PNGRB has called for input from the public and various stakeholders, including oil marketing companies (OMCs), airport operators, and airline operators, regarding the establishment of ATF pipelines linking different greenfield and brownfield airports in India.

In a notice inviting comments, the regulator stated, "Pipelines are the most cost-effective means of liquid fuel transport, whereas road transport incurs significant expenses. Considering the substantial proportion of ATF price in airline costs, the provision of pipelines could lead to a reduction in air travel expenses."

Despite an open fuel market within airport premises, the absence of a common carrier pipeline impedes the realization of an open market objective.

The regulator expressed the need to designate other ATF pipelines, currently operated by OMCs, as common/contract carriers. This decision aims to enable other OMCs to utilize these pipelines for transporting their products, fostering competitiveness within the industry.

Moreover, to guarantee a secure fuel supply, it is deemed desirable to have multiple pipeline supplies to major airports. Additionally, the regulator emphasized the importance of declaring existing pipelines as common carriers, particularly due to the historical dominance of government-owned ATF marketing companies. This step would allow private marketers access to these pipelines and accommodate the increasing fuel demand in the aviation sector.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has put forth a proposal suggesting the delivery of jet fuel or ATF (aviation turbine fuel) to all current and future airports through pipelines that are open for access by any supplier. The aim is to introduce competition and reduce fuel costs. Currently, ATF is transported via road and rail networks, and only a limited number of airports are connected to pipelines. Even in cases where pipelines exist, they operate on a non-open access basis, restricting the supply of jet fuel solely to the company responsible for their installation. The PNGRB has called for input from the public and various stakeholders, including oil marketing companies (OMCs), airport operators, and airline operators, regarding the establishment of ATF pipelines linking different greenfield and brownfield airports in India. In a notice inviting comments, the regulator stated, Pipelines are the most cost-effective means of liquid fuel transport, whereas road transport incurs significant expenses. Considering the substantial proportion of ATF price in airline costs, the provision of pipelines could lead to a reduction in air travel expenses. Despite an open fuel market within airport premises, the absence of a common carrier pipeline impedes the realization of an open market objective. The regulator expressed the need to designate other ATF pipelines, currently operated by OMCs, as common/contract carriers. This decision aims to enable other OMCs to utilize these pipelines for transporting their products, fostering competitiveness within the industry. Moreover, to guarantee a secure fuel supply, it is deemed desirable to have multiple pipeline supplies to major airports. Additionally, the regulator emphasized the importance of declaring existing pipelines as common carriers, particularly due to the historical dominance of government-owned ATF marketing companies. This step would allow private marketers access to these pipelines and accommodate the increasing fuel demand in the aviation sector.