Voronezh Joint-Stock Aircraft Society general director Mikhail Shushpanov( right), Russian First Deputy Prime Minister Dmitry Medvedev (center) and Irkut company president Alexey Fyodorov in Voronezh in January 2008
Photo: Alexander Miridonov
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President Orders Kerosene Prices Down
Oil companies have begun lowering prices for airplane fuel, after Russian President Dmitry Medvedev criticized the situation on the market last Thursday. LUKOIL announced a 9-percent reduction in price (that is, about 2000 rubles per ton) yesterday. The Alliance Group, owner of the Khabarovsk oil refinery, announced a 5-percent reduction (about 1500 rubles per ton). Gazprom Neft announced a 12-percent decrease on Friday. All of the companies credit falling oil prices for their decisions. World oil prices have fallen from $100 to $70 since the beginning of September. Sources say Rosneft, TNK-BP and Surgutneftegaz are considering changing their pricing policies.
The Kortes research center notes that airplane fuel prices have been falling since August. In that time, they have fallen 12.96 percent (to 24,660 rubles per ton) at the LUKOIL refinery in Nizhny Novgorod. At the Gazprom Neft refinery in Omsk, prices have fallen 10.3 percent, and at the Rosneft works in Samara, they have fallen 14.85 percent. At airports, prices have changed less noticeably, falling 8 percent since August in Moscow.
First Deputy Prime Minister Igor Shuvalov held a meeting with oil company executives yesterday (after LUKOIL’s announcement) to discuss kerosene prices. A pricing formula and payment mechanism were supposed to be determined at the meeting, but no agreements were reached. Sechin proposed that prices be based on long-term direct contracts. They executives have been given two weeks to work the issues out among themselves. Federal Antimonopoly Service head Igor Artemyev threatened to begin cases against the oil companies if they did not lower their prices. He spoke last Thursday, after the president expressed displeasure at the situation.
Fuel prices account for 30-60 percent of the price of an airline ticket, depending on the type of airplane. Analysts say ticket prices can be expected to fall 5-6 percent thanks to fuel price reductions.
www.kommersant.com
All the Article in Russian as of Oct. 21, 2008
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