Brazilian association concerned with aviation fuel economic abuse

Bnamericas Published: Thursday, November 17, 2022
Brazilian association concerned with aviation fuel economic abuse

Brazilian general civil aviation association Abag has consulted the local oil and gas watchdog ANP about the possibility of opening an investigation into economic abuse in the sale of fuels, or at least consider perfecting existing regulations. 

In Brazil, general aviation concentrates 95% of the civil aircraft fleet and is present in 100% of the country's aerodromes. 

The segment is composed of air cab companies, specialized in aeromedical and offshore operations (transport of people and cargo between the continent and oil platforms), agricultural aviation, flight instruction, specialized air services, and private air transport operations.

In a letter sent to ANP, Abag highlighted that, unlike airline companies – “giant corporations with enormous bargaining power with oil distributors” – general aviation involves individuals and small firms, which are obliged to pay the price charged at the pump.

“It’s the distributor who dictates the prices, and the general aviation operator has to accept the value that is offered,” Abag said. 

The association highlighted that, at several local airports, notably those operated by the private sector and designed to serve general aviation, it has noticed flagrant abuses of economic power, with airport administrators restricting the supply of fuel to a single distributor.

Abag also requested that ANP seeks to clarify whether an eventual investigation has to be opened by federal antitrust authority Cade, in which it might collaborate. 

Last week, Cade fined fuel distributors Air BP, Vibra Energia, and Raízen for erecting artificial entry barriers to the aviation kerosene market at São Paulo’s international airport (Guarulhos). 

Guarulhos accounted for almost half of the country’s aviation fuel consumption in January-June, with 1.2 million cubic meters. 

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