Vinapco’s jet-fuel monopoly could end

The Vietnam Air Petrol Co. (Vinapco) has been fined by the Vietnam Competition Council (VCC) for unilaterally breaking a fuel supply contract with Jetstar Pacific Airlines (formerly Pacific Airlines). The supply problem forced Jetstar to cancel all its flights on April 14, 2008. Vinapco has been ordered to pay three billion dong (US$175,438) as penalty. Vinapco contracted to sell aircraft fuel to Vietnam Airlines and Jetstar Pacific Airlines at US$593 a ton when the global crude oil price was around US$76.2 per barrel. When oil prices crossed US$100 per barrel, Vinapco raised its supply rate to US$750 per ton for Jetstar. However, Vinapco did not raise prices for its affiliate Vietnam Airlines. When Jetstar rejected the offer, Vinapco canceled Jetstar’s supply contract. Meanwhile, the VCC has asked the government to spin off Vinapco from Vietnam Airlines and allow other firms to sell jet fuel in Vietnam. (April 22, 2009)