BPCL in aviation fuel venture with MIAL, IOC, HPCL

BPCL is forming a joint venture with Hindustan Petroleum Corp (HPCL), Indian Oil Corp (IOC) and Mumbai Airport International, to put up infratrsucture and sell aviation turbine fuel (ATF).

“Every one will have a 25% share in the venture and it would be called the Mumbai Aviation Fuels Ltd. The agreement would be signed by the end of this month,” Shyamal Bhattacharya, general manager, marketing - lubes, BPCL said.

“Our priority is to clean up the balance sheet, to recover dues and consolidate. We would like to increase our market share in aviation fuel. We have targeted a 10% growth in that,” Bhattacharya said.

Nacil, which runs Air India, has an overdue of `240 crore, he said. Kingfisher Airlines owes something similar to HPCL, he said.

The Mumbai operations would run in a similar manner as its Delhi venture, where it formed Delhi Aviation Fuel Ltd, where BPCL and IOC have 37% stake each, and the remaining is with the Delhi International Aviation Authority.    

Most of the downstream companies are doing business separately but this venture will hold the business and also own the infrastructure in Mumbai.

“We have not decided the share capital we have to value the assets,” Bhattacharya said.

The ATF business model has changed so what we are doing is focusing on areas where we can make more money and consolidate the business by recovering whatever is due with the airline, particularly domestic airlines, and like to expand in more airports. Right now we are in 29 airports in the country we would like to add more,” Bhattacharya said.