The Russian Government, Ministry of Transport and Ministry of Finance currently continue discussing the issues concerning jet kero prices control and measures for domestic air carriers support. For example, compensation of expenses arising out of the tax manoeuvre to the Russian oil VICs (vertical-integrated companies), aviation fuel price freezing, as well as increase of the re-excise duty for jet kero to be used by domestic airlines are under consideration as high priority measures.
Aerofuels Group of Companies, currently offering refueling in 28 Russian airports through their own refueling network and possessing a vast experience in that field, applied to the Federal Antimonopoly Service of Russia with their proposal on aviation fuel prices reduction and domestic air carriers support. To settle the problem the company considers it right and topical to provide increase of the re-excise duty for aviation fuel to be used by domestic airlines at the government level. With such form of support airlines are fund receivers, i.e. entities directly rendering services to general public and suffering negative fuel prices growth consequences most badly. It is important that re-excise duty mechanism does not disturb competition in the aviation fuel market. Additionally to the proposed Aerofuels considers it necessary to consider the option to increase re-excise duty with a scale-up factor at its reimbursement in the 1st and 4th quarters when the Russian air carriers suffer the maximum loss due to declining demand for air flights. Besides, it is proposed to establish a high reimbursement coefficient of excise duty during the Russian manufacture airplanes refueling. This measure is offered by Aerofuels as an additional motive for airlines to put into operation new-generation domestic aircrafts.
There is one more Aerofuels proposal with which they have already applied to the Ministry of Finance of Russia – a legal increase of the minimum volume of production which VICs sell through stock trading with current 10% - 15% of total sales volume. Such approach application will increase transparence of stock trading and also will provide practical introduction and maximum popularization of domestic indicator of aviation fuel stock prices in the Russian Federation.