This global petroleum giant is making its debut in the high-stakes Indian ‘Jet-Fuel’ market

British petroleum major BP Plc, which is on the edge of entering the rapidly expanding jet fuel market of India, has crossed a significant regulatory milestone in the process.

"BP has been granted 'in-principle' approval to market aviation turbine fuel (ATF) in India ... Air BP aims to build a strong, sustainable and material business in India, drawing upon our global expertise combined with the skills of a strong local partner," a company spokesperson told ET.

What attracted BP to India was its rapidly growing airline business, which is expected to be the third largest by 2020. BP, which is one of the world's largest aviation fuel marketers, has a presence in 50 countries and boasts of several airlines, airports and military organisations as its clients.

After its debut in the Indian market, its long experience, expertise and brand equity will be in competition with the easy supply, longstanding ties with clients and control over marketing infrastructure of the already existing Indian companies.

Talking of the legal formalities, for a licence to market transport fuel in India, a company must have invested or proposed to invest at least Rs 2,000 crore in exploration and production, refining, pipelines or terminals in the country. Last year, the Indian government had rejected BP's application for licence on this very ground.

These competitors include private players like Reliance Industries, Essar and a joint venture of Shell and state-run MRPL. However, even these players have failed to challenge the dominance of state firms, and especially Indian Oil, which happens to be the market leader with a 64% share. The reasons for its dominance include traditional ties with clients, including the government, and superior infrastructure across the country.

Image source