Oil Cos Told To Brace Up For War With Addl Stocks Of ATF

New Delhi, May 24: | Updated: May 25 2002, 05:30am hrs
The government has asked oil companies to increase the stock of aviation turbine fuel (ATF) in the wake of increased war perception. Sources said ATF storage at air force stations is being maintained at full capacity. During normal times, the capacity is kept at around 80 per cent.

The government usually maintains a stock of 60 days for petroleum products in order to meet any eventuality. ATF consumption for defence needs is about 20 per cent of the total 2.27 million tonne (mt), which works out to be 0.5 mt.

Though ATF was de-reserved last year, public sector monopoly continues with Indian Oil cornering a major chunk of 68 per cent market share. IOC’s share in ATF being used for defence purposes is around 80 per cent. Rest of the 20 per cent is supplied by the two other state-run companies, Hindustan Petroleum and Bharat Petroleum.

The country has a small surplus of ATF. The total production in the country is around 2.62 million tonne (mt) per annum, out of which 2.27 mt is consumed in the domestic market while a small portion is exported. Sources added that exports are not a routine and no exports have been made for the last few months.The defence ministry does not source ATF from Reliance Industries as of now. “However, ATF from RIL’s Jamnagar refinery can be used if need arises,” added sources.

Reliance, which has a 27 mt refinery at Jamnagar in Gujarat, got approval to market ATF last year. Though there have been talks of increasing the strategic reserves of petroleum products ever since the terrorist attacks on the World Trade Centre in New York last year, the government is yet to make any concrete move since it will entail an additional burden on the oil companies in terms of storage and inventory costs.

Sources added, “Reliance has already received government’s approval to market ATF and is in the process of setting up the required infrastructure.”

The current base price of ATF is around Rs 14.7 per litre (Rs 14,691.74 per kilo litre).

Defence purchases are made on the basis of contract and price is based on a well-defined formula so day-day fluctuations do not take place. “There are minor price changes on a monthly basis,” said sources.