Private players in India are steadily increasing their presence in the aviation fuel business, with Reliance-BP and Shell-MRPL leading the way. These two joint ventures expanded their market share from 5.5% in February 2022 to 9% in February 2023. Reliance-BP witnessed a rise in share from 3.3% to 5.4% during this period, whereas Shell-MRPL’s share increased from 2.2% to 3.6%. State-run refiners have traditionally dominated the aviation fuel business in India, but private players have been gaining ground over the past decade. This growth can be attributed to open access at airports, which has enabled private players to expand their supply networks and serve domestic airlines efficiently. Reliance-BP and its joint venture with BP currently supply jet fuel to around 30 airports in India. Similarly, Shell’s joint venture sources jet fuel from MRPL’s Mangaluru refinery to supply airports in South India.
The increasing market share of private players in the aviation fuel business can be attributed to their efforts in expanding the supply network to more airports and winning new deals with airlines. Private players have the incentive to expand their domestic market share as margins on jet fuel exports are slightly lower than on domestic sales. Moreover, the jet fuel market in India is witnessing good health this year after experiencing lower volumes due to travel restrictions during the pandemic. Jet fuel sales have exceeded pre-pandemic levels, mainly due to the surge in domestic air traffic. The presence of open access at airports has been crucial for private fuel suppliers to compete with state-run oil companies, which have control over the supply infrastructure. Most major airports in India now have open access.
Overall, the growing market share of private players in the aviation fuel business indicates a shift in the industry dynamics. As private players continue to expand their supply networks and secure deals with airlines, they pose a significant competition to state-run refiners. This competition is beneficial for the aviation industry as it promotes efficiency and innovation in the fuel supply chain. With the positive momentum in the aviation fuel market, private players are well-positioned to further increase their market share and contribute to the growth of the sector.