'DNA' viewpoint: Don’t armtwist oil marketers

The decision to allow free imports of aviation turbine fuel is fraught with complications and ill-serves oil marketing firms.

First up, airlines don’t have the cash flows to buy aviation turbine fuel abroad. Foreign fuel sellers will seek cash or lines of credit from lenders. It’s difficult to envisage banks rushing in, considering the wreckage that the over-levered balance sheets are of the airlines.

Secondly, there’s also an infrastructure problem. Airlines don’t have the capacity to store fuel — they’ll need a network of hundreds of storage tanks across the country. They don’t have one now. It takes years to build out such infrastructure. To boot, there’s no money.

The best-case scenario for the airlines is to get the oil companies to rent out their infrastructure. But it makes zero business sense for oil companies to help — and hurt themselves. Already they don’t get paid regularly for fuel sold.

So will they be arm-twisted by the government to help out the private airlines - and savage their balance sheets yet again? That’s just not on. Instead, let them ally with private sector refiners who’ll take the business risk and carry the can.

Let the oil marketers be.