Central government-owned oil marketing companies Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) will form a joint venture to manage refuelling facility at all the airports that are run by the Airports Authority of India (AAI) by the end of 2017.
Following the news, the IOC stock was trading at Rs. 573.25 at around 10:55 a.m. on Wednesday, down 0.04 percent. HPCL stock was trading at Rs. 1,192.50, up 0.49 percent from its previous close, while the BPCL stock was trading 1 percent low at Rs. 601.30 from its previous close on the Bombay Stock Exchange.
The AAI, which maintains and manages civil aviation infrastructure across the country, will be an equity partner in the new joint venture firm, Business Standard reported.
The Mukesh Ambani-led Reliance Industries had also shown interest to be a part of the joint venture, and had approached the petroleum ministry and AAI. However, inclusion of a private player in the collaboration would have changed its nature, an official was quoted as saying by the publication. "There will be no private parties in the venture. However, it may follow an open access system to all fuel suppliers, where anybody can pay and use these facilities," the source told the daily.
The joint venture will cover most fuelling facilities offered in India, except Delhi, Mumbai, Hyderabad and Bengaluru, which involve private players.
Share holding in the new venture:
- Indian Oil Corporation will hold 37.5 percent.
- Airports Authority of India will hold 25 percent.
- Hindustan Petroleum Corporation Limited will hold 18.75 percent.
- Bharat Petroleum Corporation Limited will also hold 18.75 percent.
Aviation Turbine Fuel (ATF) or jet fuel prices fell 4 percent on Aug. 1 after five straight months of increase. ATF price accounts for nearly 30-35 percent of the operating costs for airlines and directly impacts profit margins.