Government rejects BP’s application

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Press Trust of India, New Delhi, March 30: The government has rejected BP’s application for selling aviation turbine fuel (ATF), saying its expenditure in India so far does not qualify it to get a fuel retailing license, but has allowed it to apply afresh with more details.
The petroleum ministry, earlier this month, wrote to Europe’s second-largest oil company, saying its USD 477 million investment in India till date does not qualify it to begin selling jet fuel to airlines, a senior oil ministry official said.
A license to retail any of the transport fuels – petrol, diesel or ATF – is contingent upon a company investing or proposing to invest `2,000cr in oil and gas exploration and production (E&P), refining, pipelines or terminals within 10 years.
The official said BP’s USD 477 million investment since entering in 2011 included both capital and operating expenditure, mostly in its partner Reliance Industries’ offshore blocks, including the flagging KG-D6 in Krishna Godavari basin.
To qualify for a fuel retailing license, an entity should have made capital investment of `2,000cr or USD 500 million, in line with the 2002 fuel retailing guidelines.
BP’s USD 7.2 billion spending in buying 30 per cent stake in 21 exploration blocks of RIL is not being considered as capital investment, he said.
He added that the letter clearly states that BP can make fresh application detailing future investments to qualify for an ATF license.
When contacted, BP spokesperson said, “BP has been continuously engaging with the ministry of petroleum and natural gas regarding the licensing application and we are confident of meeting the requirements. We will continue to work closely with government authorities and urge them to review the decision.”
The company had, in January 2014, made the second application to start operations of Air BP, its aviation arm that sells ATF to airlines at airports.
It is keen to enter the booming aviation market in Asia’s third-largest economy. Jet fuel demand is expected to rise by 3-4 per cent annually over the next few years.
After BP’s application, the then oil secretary Vivek Rae had stated that BP was “looking at marketing of aviation turbine fuel”. BP however, was not interested in auto fuel retailing.