A source in HPCL said, We believe that there is a huge potential for growth in this segment. The corporation currently has 10 aviation stations which cover the four metros and we are planning to take it forward to other cities across the country. The greatest strength for us is that HPCL is already an International Air Transport Association (IATA)-approved fuel supplier which enables the company to supply ATF to any airplane across the world. With two dedicated ATF pipelines and all new initiatives, we are hopeful of doubling our market share, he added. The companys ATF division provides fuelling service to both international and domestic airlines. It meets the requirements of Indian Airforce through 10 aviation service facilities across the country. The companys current market share is around 10 per cent with total sales of 225 thousand metric tonne (TMT) of ATF.
It has recently bagged contract from UBS group which was earlier with the Bharat Petroleum Corporation Ltd. The corporation has initiated steps to expand its aviation network spread, raise its operational standards and consolidate its customer base. The company is looking forward to set up aviation stations in Sourthern part of India which include cities like Hyderabad, Bangalore, Calicut, Cochin and Visakhapatnam.
In order to upgrade its stradard of service on par with international standards, HPCL has entered into a techno-commercial agreement with Chevron Texaco Global Aviation. The agreement broadly covers areas of quality control, operational standards, technical issues and training.
The government decontrolled ATF market from April 2001 and since then, ATF price is being fixed on import parity basis and bearing actual marketing cost for supply at each airport.
The airlines have been bearing the additional burden of high sales tax in the domestic market. However, this is not applicable for fuel supplied on international sectors. Sales tax rate varies from four per cent in Andhra Pradesh to 34 per cent in Kerala. Domestic airlines have planned their fuel upliftment patterns to minimise outgo on sales tax.
The company is in talks with three domestic companies in the E&P business, to bid for the the exploration blocks offered in the fourth of New Exploration Licensing Policy (NELP). The last date for filing expression of interest (EoI) for these blocks is September 30. At present, Prize Petroleum, a joint venture company with financial institutions would advise HPCL on the E&P business. We are using Prize Petroleum as the spring board for upstream activities, said Mr Lal. Prize Petroleum on its own has not been able to bag any E&P contract, though it was formed for participation in E&P of hydrocarbons. HPCL has also submitted expression of interest (EoI) for acquiring 100 outlets which have been put on the block by Ceylon Petroleum in Sri Lanka. Mr Lal informed that HPCL has been shortlisted and asked to submit technical and price bids by the Sri Lankan government for the 100 pumps of the total of 260. Indian Oil Corporation (IOC) has already bought over 100 petrol pumps from Ceylon Petroleum.
The company is in the process of setting up a lube blending plant in Bangladesh which will be operational by the end of this year. This will cost the company Rs 40 lakh. The company is also looking at setting up a Liquefied Petroleum Gas (LPG) bottling plant. The bottling plant will have a capacity of 400 cylinders per day, said a senior company official.
The official added, Out of the 260 petrol stations belonging to Ceylon Petroleum, Indian Oil Corporation (IOC) has already acquired 100 stations, while another 100 petrol stations are on the block. HPCL has emerged as one of the prospective bidders for the petrol pumps along with a part of storage facility in Sri Lanka. As far as Nepal market is concerned we are still waiting for the market to get opened.
While the company continues to export its finished lubricants to neighbouring countries like Bangladesh and Nepal, the corporation has also forayed into Yemen for auto coolants.
As a part of the companys new marketing initiative, HPCL has entered into agreements with leading auto manufacturers like Tata Motors and Kinetic Engineering for marketing of co-branded lubricants for four and two wheelers respectively.