'State-owned refineries to be hit by ATF imports'

Experts have expressed concern over the government’s decision to allow domestic carriers to import aviation turbine fuel (ATF) as the move is likely to take its toll on state-owned refineries.

The refineries will now have to scout for customers to export their products in case they find no takers back home.

“They (the state-owned refiners) will either have to take a hit on their margins in order to retain their airline customers or export ATF,” an oil expert said.

According to former DIPP secretary R P Singh, the government, instead of  letting its oil refiners incur losses, should ensure that the tax on ATF is reduced.

“Why don't you declare it as a declared good under Central Sales Tax? If you feel that other state governments will not agree, let the Congress state governments declare that they will not charge more than four per cent sales tax on that,” Singh recently told a private TV channel.

ATF is the only source of revenue for of oil marketing companies since petrol, diesel and kerosene are all subsidised.

Besides, the domestic consumption of ATF has been growing at around 10 per cent as airlines have expanded capacity by 18-20 per cent of late.

The government’s move allowing ATF import has been criticised because of the whopping transportation cost the carriers are expected to incur and the lack of storage facility available with them.