GACA asks Aramco to cut jet fuel price - report

Expensive jet fuel harming competition, says Saudi's GACA.
NEWS, Aviation


Aviation authorities in Saudi Arabia have asked the country’s biggest oil producer to reduce its jet fuel prices in preparation for the entrance of new domestic airlines, a local newspaper reported.

Saudi’s General Civil Aviation Authority (GACA) believes that Saudi Aramco should reduce the amount it charges for aviation fuel to bring prices in line with neighbouring Gulf countries and stimulate competition in the domestic market.

“Aramco is charging airline companies prices higher than international prices, even in neighbouring countries with lesser potential,” GACA vice president Faisal Al-Sugair told Al-Eqtisadiah. “It is unreasonable that the world’s top oil producer demands a higher price than other countries with lesser oil resources.”

Al-Sugair added that higher jet fuel prices can lead to airlines choosing to refuel outside of Saudi Arabia and that aircraft landing at airports in the Gulf kingdom with fuller fuel tanks could cause damage runways.

Currently, Saudi Arabia’s domestic aviation market is served only by Saudi Arabian Airlines and low-cost nasair, but GACA is currently in the process of opening up this market to foreign carriers.

A third, Sama Airlines, ceased operations in 2011.

Qatar Airways, Bahrain Air Gulf Air are among the 14 carriers to have applied to GACA to setup a domestic airline in Saudi. Approval for new carriers to expected in 4Q2013.

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