Civil Aviation Minister Ajit Singh wants regulation of aviation turbine fuel (ATF) prices and has demanded that oil companies end discrimination against Air India. Singh met Petroleum Minister Veerapa Moily to air the concerns of airlines regarding ATF pricing and use of oil companies infrastructure by airlines for fuel import.
Airlines in India have been reeling under losses due to high fuel prices and seeking revision in sales tax which is as high as 25-28% in certain states. However, so far government has not accepted airlines' demands for lower taxes on fuel.
Ajit Singh said the meeting was "positive" and Moily had in principle agreed to airlines' demand to let allow them use infrastructure for import of ATF. However, others present at the meeting said that the Petroleum Ministry officials and executives from oil companies were still opposed to many of the demands. SpiceJet, Kingfisher and Air India have expressed interest to import ATF.
"The pricing of ATF is not transparent and should be brought under he Petroleum and Natural Gas Regulatory Board," Singh stated.
A general manager in charge of aviation from oil marketing company said, "The board will seek more transparency. Oil marketing companies will be subject to scrutiny. Also once the ATF supply is regulated state oil companies will have to give access of their off site infrastructure [pipelines or railway wagons] to private companies which are keen to supply fuel to airlines. Private companies like Reliance will benefit from this."
Singh also pointed out that oil companies were offering discounts in ATF sales to airlines other than Air India and demanded similar concessions for it. He said the airline will clear the pending dues of oil companies once it receives fresh equity from the government. Air India has been put on a cash and carry system by the oil companies.
"We will take up the issue of declaring ATF as a declared good with the Finance Ministry," Singh said. Declaring ATF as a declared good will result in a uniform sales tax.
