• Wednesday, August 10, 2022

Business

Sri Lanka’s pain is India’s gain: How island crisis is helping India’s oil companies

A man waves Sri Lanka’s national flag outside presidential secretariat in Colombo on July 13, 2022. (Photo by ARUN SANKAR/AFP via Getty Images)

By: Shubham Ghosh

INDIAN oil-marketing companies such as Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Indian Oil Corporation Ltd are not exactly complaining about the financial devastation that the southern neighbour of Sri Lanka is facing, thanks to a rise in demand of aviation turbine fuel (ATF) at airports in India’s southern parts as airlines with flights going to and originating from the island-nation are refuelling on the Indian shores.

According to a report in Moneycontrol, airlines operating in Sri Lanka have been making ‘technical landings’ at airports in southern Indian ‘pit stops’ since the beginning of this month, primarily to refuel because of a severe shortage of fuel in Lanka which is in the middle of a severe economic political crisis which has now resulted in political instability.

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Among others, Sri Lankan Airlines, Air Arabia, Gulf Air and Jazeera Airways are landing at Indian cities such as Kochi, Thiruvananthapuram (both in Kerala) and Chennai (Tamil Nadu) to buy fuel, the report added.

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‘Technical landings’ are referred to those landings where no unloading of people or luggage happens. This demand for fuel by these planes to and from Sri Lanka has emerged at a time when the ATF is selling at record prices and it will boost the oil-marketing firms’ revenue when they are booking losses on the fuel’s retail sale, Moneycontrol added.

These oil companies have consistently raised the price of fuel sold to bulk consumers and for aviation turbines in sync with international crude oil prices but they had left retail prices untouched for almost 137 days until March 22, despite the crude oil prices rising steeply.

These ‘technical landings’ are also adding to the revenue for the Indian airport operators.

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