The ball has set rolling for setting up a common jet fuel supply infrastructure in India’s airports in a regulated regime.
In Mumbai, the airport developer and the oil marketing companies have formed a working group to finalise issues of integration facilities in a mutually agreed time frame.
A common formula for throughput charges is also being worked out.
Last week, the government approved amendments in the Airport Economic Regulatory Authority (Aera) Bill for setting up common jet fuel infrastructure in all airports.
More than one oil company supply aviation turbine fuel at most airports. The oil companies pay a throughput charge to the airport operator at mutually negotiated rates.
The government is of the view that for greater competition in favour of the airlines and for optimal utilisation of ground infrastructure, a common fuel supply infrastructure needs to be developed at airports through which jet fuel can be supplied in airports.
Airlines believe that throughput charges push jet fuel prices further up in India forcing them to hike fares.
Officials said discussions have already begun to hammer out a mutually acceptable solution on contentious issues, including relocation of Bharat Petroleum Corporation facilities in Mumbai from Sahar for setting up the common infrastructure.
A joint venture company owned by the GVK led consortium and Airports Authority of India was formed in March 2006 to manage and develop the Chattrapati Shivaji International Airport in Mumbai.
In Delhi, the airport developer has invited expressions of interest for construction and operation of a new hydrant system and seven domestic and international firms have submitted the preliminary proposals.
The GMR led consortium -- Delhi International Airport Limited (DIAL)—that is modernising the Indira Gandhi International airport in the capital-- has drawn out elaborate plans for modernising and setting up a common jet fuel supply infrastructure.
DIAL has asked Indian Oil Corporation to upgrade their facility to meet aviation fuel storage requirement of Hindustan Petroleum Corporation and Bharat Petroleum Corporation at the domestic airport. It has also started construction of a new aviation fuel storage facility adjacent to the existing storage depot of an oil marketing company, an official said.