The oil regulator, Petroleum & Natural Gas Regulatory Board (PNGRB) wants to declare the Aviation Turbine Fuel (ATF) pipelines of BPCL and HPCL running between their Mumbai refineries and the Mumbai airport as common carrier. The impetus for this is, affordability and route navigation. Mumbai is an extremely congested city with heavy traffic, the airport has large volumes. ATF supplies to the airport by road or any other means is simply not an alternative that can be considered. This was a reasonable line of thinking, largely accepted by multiple stakeholders and therefore in the middle of last year, PNGRB issued public notices declaring both the existing pipelines as common carrier and invited suggestions from various stakeholders.
Apart from routing concerns, the common carrier move also addresses affordability issues. The open access would enable competition and participation of private companies will make the ATF supply cheaper. Mumbai accounts for about 20 per cent of the total consumption of ATF across the country. No private ATF supplier is able to supply ATF at Mumbai airport due to transportation constraints. The fuel cannot be moved through trucks, neither can fresh pipelines be laid given the congestion in Mumbai.
This situation is fully exploited by the three oil PSUs – HPCL, BPCL and IOCL – who presently supply ATF at the Mumbai airport. The three PSUs charge very high landed cost of ATF at the Mumbai airport compared to other airports where there is a competition from private ATF companies.
The Mumbai Aviation Fuel Farm Facility Ltd (MAFFFL), a company of Mumbai International Airport Pvt Ltd (MIAL), was created in 2010 in which the three oil PSUs have a 25 per cent share each. MAFFFL has the license for development of an integrated fuel facility. An integrated ATF Fuel Storage facility available to all ATF suppliers on open access basis upon full commissioning, is envisaged. However, in reality this cannot happen unless the ATF pipelines of HPCL and BPCL are made common carriers.
The two PSUs have set their faces against this issue and have moved APTEL against PNGRB’s public notices on considering to declare the two existing pipelines as common carrier. The matter is listed for hearing on July 5, 2019. Arraigned on one side is the Regulator, multiple industry bodies and above all public interest and on the other side are the two PSUs who are bent on status quo, which in effect means no competition and expensive supplies for the airline industry.
