For the first time in Russia, the cost of aviation kerosene at the country’s airports has exceeded the world level. The average price for the kerosene in Europe has lowered 8 percent since May, but the prices in Russia that were fixed in early June stand still, driving up the prices for charter flights.
The prices for aviation kerosene have doubled since the summer of 2007. In foreign airports, however, the decline started in May, but the trend hasn’t extended to Russia. As a result, in London Heathrow Airport, the kerosene costs 6.2 percent less than in Moscow and the price is 8.1 percent less in Dubai.
The difference in prices could be attributed to the market control over the prices. “On a free market, the price is the subject of bargaining between a seller and a buyer, while here, the price is fixed by the manufacturer with no other limits but for the psychological tolerance,” said TOAP owner Evgeny Ostrovsky. TOAP is the biggest independent wholesale supplier of aviation kerosene.
“Unlike western markets, the cost of aviation kerosene here is fixed once a month. So if the global trend proves stable, Russia’s prices will probably go down as well,” said Pavel Strokov, who is the promotion and marketing director at KORTES Information Center. Regardless, the prices for aviation kerosene are tied to the oil prices and those prices continue to increase, Strokov pointed out.
The prices for aviation kerosene have doubled since the summer of 2007. In foreign airports, however, the decline started in May, but the trend hasn’t extended to Russia. As a result, in London Heathrow Airport, the kerosene costs 6.2 percent less than in Moscow and the price is 8.1 percent less in Dubai.
The difference in prices could be attributed to the market control over the prices. “On a free market, the price is the subject of bargaining between a seller and a buyer, while here, the price is fixed by the manufacturer with no other limits but for the psychological tolerance,” said TOAP owner Evgeny Ostrovsky. TOAP is the biggest independent wholesale supplier of aviation kerosene.
“Unlike western markets, the cost of aviation kerosene here is fixed once a month. So if the global trend proves stable, Russia’s prices will probably go down as well,” said Pavel Strokov, who is the promotion and marketing director at KORTES Information Center. Regardless, the prices for aviation kerosene are tied to the oil prices and those prices continue to increase, Strokov pointed out.
Source: Kommersant
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