RA STATE COMMISSION ON PROTECTION OF ECONOMIC COMPETITION AGREES TO
CHANGE AVIATION FUEL PRICE MARGIN

YEREVAN, APRIL 12, NOYAN TAPAN. At the April 11 sitting, the RA State
Commission on Protection of Economic Competition discussed the
application of Armenia International Airports (AIA) CJSC. The company
applied to the Commission with the request to review the difference
(margin) in the aviation fuel purchase and sale prices. An
administrative procedure was initiated based on the application.

The company presented a certificate substantiating the change in the
aviation fuel price, according to which there are three factors
substantiating a change in the difference (margin) in the purchase and
sale prices: the growth of expenditures, the growth of the purchase
price and the decline in the purchasing power of the US dollar. The
growth of expenditures is conditioned by the growth of the staff, an
increase in salaries and the rates of compulsory social payments, and
an increase in amortization costs at the expense of newly purchased
fixed assets, municipal payments, etc.

According to the company, the purchase price of aviation fuel has
increased almost 2fold, which in its turn has resulted in over 2fold
growth of funds for the formation of aviation fuel stores. The
environmental payment to be made on the customs border has also
increased in connection with the growth of the aviation fuel purchase
price. In 2005-2007, inflation made over 10% in the U.S. so the
previous profit of 56 USD (profit made from the sale of 1 ton of
aviation fuel) currently corresponds of the profit of 62 USD. Under
these conditions, in case of the current purchase price of 1,164 USD,
AIA CJSC proposed establishing a difference (margin) of the purchase
and sale prices at 141 USD, which will ensure a profit of 62 USD from
the sale of 1 ton in case of purchasing 35 thousand tons of aviation
fuel.

Under the 2005 decision of the Commission, a 99 USD difference (margin)
of purchase and sale prices was established for 1 ton of aviation fuel.
In its application, AIA CJSC requested the Commission to establish a
141 USD difference (margin) under conditions of the purchase of 1 ton
of aviation fuel for 1,164 USD.

According to the Commission’s press service, having come to the
conclusion that a 141 USD difference (margin) in the purchase and sale
prices, which was proposed by AIA company with the respective
substantiation (calculation of the expenditures and profit), is
acceptable under current conditions of purchasing aviation fuel for
1,164 USD, the Commission approved the company’s proposal.

From: Emil Lazarian | Ararat NewsPress