Aeroflot reaches new agreement on kerosene prices
Moscow, 1st November 2008: JSC «Aeroflot Russian Airlines» and leading Russian oil companies have reached an agreement on the mode of calculation of kerosene prices. «Gazprom Oil» acts as the Russian oil companies’ main consolidator. The agreement has been made in the context of the government’s program aimed at stabilizing fuel prices, which contains measures concerning the shift to longtime contracts between airlines and oil companies, and a formula for the calculation of kerosene prices.
Application of this formula between Aeroflot and the oil companies allows for pricing based on international market prices and to consider the airline’s specific situation. The most important reference points for pricing are the quotations of the worldwide accepted agency «Platts».
According to Valery Okulov, Aeroflot CEO, this agreement is an effective instrument of flexible cost control related to the purchase of oil and oil products, as well as a hedge against risks of price volatility.