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22/08/2017 16:47
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Why Tajik planes force to refuel abroad?

16/05/2017 18:15

Tajik air carriers are increasingly making unforeseen landings for refueling at airports in neighbouring countries. Passengers are late for connecting flights and are indignant, airlines are trying to justify themselves. Who should be blamed and what to do? The reporter of Asia Plus News Agency, Tajikistan, tried to study this problem.

Passengers complain about the recent cases of landing of the Tajik Air and Somon Air aircraft at the airports of neighbouring countries for refueling. And not always they are warned about the forthcoming landing. As a result, for an hour or two, the time of flight increases, people experience discomfort, they are late for connecting flights at destination airports. And they make a logical conclusion: we hell our patriotism and from now on, we will fly with foreign airlines!

Tajik air carriers lose passengers and, accordingly, income/revenues, but they say they can do nothing in this regard. And industry experts mention about refueling centers.

Mysterious refueling companies

We are talking here about refueling companies. An open joint-stock company was established for refueling purposes in 2010 during the restructuring of the state unitary aviation enterprise Tajik Air. Currently, this company owns the exclusive right to supply jet fuel to Tajik airports and to refuel aircraft.

It is interesting that the refueling company did not immediately become a monopolist in the market. Initially, it was part of the state air carrier Tajik Air and was engaged only in refueling at airports. Fuel was supplied to the country by other domestic and foreign companies. After the restructuring of Tajik Air, Fuel Company JSC was established, a structure, which is independent from Tajik Air, and it was engaged not only in refueling, but also in supply of jet fuel.

Who is the owner of a controlling stake in this joint stock company - the state or private individuals - we do not know, but it grew rapidly and aggressively seized the market. Already in 2015, according to statistical data, Fuel Company JSC accounted for 75% of the total volume of jet fuel delivered to Tajikistan. And since last year, this type of fuel has been imported by this company exclusively.

Unearned appetite

Monopoly almost always harms the market. So it happened, it seems, in the case of the tanker. Last years fuel in the Tajik airports became the most expensive in the region. The Tajik refueling company currently purchases jet fuel for US $ 600-700 per metric ton from Russian refineries. Import of fuel within the indicative balance of Russia for Tajikistan is carried out at zero rate. Delivering kerosene to Tajikistan, this company sells it to airlines almost twice as much – for US $ 1,100-1,200 per metric ton. At the same time, in neighbouring countries, a metric ton of jet fuel costs US $ 700-800. The same Kyrgyzstan, which also does not have its own fuel and imports it from Russia on the same terms as we do, sells kerosene to airlines for US $ 800 per metric ton.

Why are we so expensive?

Our repeated attempts to meet with the responsible persons of the fuel and energy sector to get an answer to this question have ended unsuccessfully.

Then we applied to the Antimonopoly Service.

“Everything is normal, we are on guard!”

Strangely enough, the Antimonopoly Service of Tajikistan considers it fair, as regards the prices for jet fuel. The ministry says that Tajikistan imports jet fuel from other countries and, taking into account all expenses, fuel, naturally, will be much more expensive than in the exporting countries. “The supplier company has certain costs for the delivery of aviation kerosene and payment of excises in Tajikistan”, the antimonopoly authority justifies its opinion.

Moreover, this agency emphasizes that in recent years the prices for jet fuel in Tajikistan have significantly decreased. “Last year, there were complaints from airlines about the revision of prices for aviation kerosene in domestic airports. As a result, prices were reduced from $ 1,350 to $ 1,120 per metric ton. In the previous years, each metric ton of fuel at Tajik airports cost up to $ 1,400 and even more for airlines”, the Antimonopoly Service said.

The agency assures that the fuel market is under its constant supervision and, as necessary, prices will be reviewed.

Refueling sector needs reforms

By and large, we do not care how much the company earns on each metric ton of aviation kerosene - $ 100 or $ 300. We would not raise this topic at all, if not for one circumstance. The fact is that high prices for jet fuel primarily hit the Tajik airlines. namely the state-owned Tajik Air and private Somon Air.

Foreign air carriers have already come up with how to mitigate the problem of high fuel prices at Tajik airports. When flying to Tajikistan, they just try to fill in the airports of their registration to have enough fuel on the way back. And thus significantly save on fuel. Tajik carriers, however, are deprived of such an opportunity – most of the aircraft of both airlines do not allow fuel to be filled with a margin. And if you consider that the costs of any flight are almost 60% dependent on the price of fuel, it becomes clear that our national carriers are in a known losing position. Hence, there are high prices for air tickets, additional landings for refueling in neighbouring airports and discontent of passengers. And this is deplorable financial condition for our airlines.

Experts are convinced that the situation on the domestic jet fuel market will not change, as long as the refueling company’s monopoly remains. According to their opinion, Tajikistan should return the right to refuel planes to airports, which, in turn, could choose a supplier of aviation kerosene on a competitive basis, as currently about 100 different subjects are involved in the supply of oil products to Tajikistan. With such competition, each entity will try to offer lower prices for refueling.

The problem has existed for more than a year, but the Government does not solve it for some reason. For some reason, the Antimonopoly Service itself does not see an obvious monopoly on the part of this refueling company and they simply do not understand the situation.

Is someone interested in bankruptcy of Tajik airlines?

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News on this topic:

 22/08/2017 16:47   Who regulates prices for domestic flights in Kazakhstan?
Aviation in press
 16/08/2017 18:19   Flight safety issues discussed with airlines in Kazakhstan
Aviation in press
 02/08/2017 09:05   Dushanbe – Tashkent flight: to be or not to be?
Aviation in press
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