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| Monopoly oil supplier grounds carrier |
| 10-APR-2008 Intellasia | Thanhniennews |
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| 10 Apr, 2008 - 7:00:00 AM |
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The unresolved dispute between Pacific Airlines and its sole fuel supplier last week has again set the media abuzz over the monopoly system.
Vietnam Air Petrol Co (VINAPCO), an affiliate of Pacific's state-run rival Vietnam Airlines, cut off Pacific's fuel supplies for around two hours on April 1 as the two sides argued over the price increase effected by VINAPCO.
The delay grounded 30 of Pacific's flights and left some 5,000 passengers stranded at the airport.
Pacific said under a contract signed last December, VINAPCO had agreed to supply fuel at 593,000 dong per tonne for the whole year.
But less then three months after signing the deal, VINAPCO demanded 750,000 dong per tonne.
VINAPCO said it needed to increase fuel costs to cover the skyrocketing world oil prices, which have gone past US$100 a barrel in recent times.
VINAPCO also referred to the contract allowing it to adjust prices provided it informed Pacific by fax.
This term is reminiscent of the contract between state monopoly power supplier Electricity of Vietnam (EVN) and its clients.
EVN is vested with the power to cut off supply if a client does not pay the bill on time.
But it bears no responsibility if load shedding lasts for long and takes a toll on people's lives.
Such unfairness exists because EVN is still a monopoly supplier.
To turn back to the case of Pacific Airlines, economist Le Dang Doanh said VINAPCO had capitalised on its monopoly position to act for its own benefit.
When VINAPCO acted solely for the benefit of its parent company Vietnam Airlines, Pacific and other carriers would bear the brunt and lose their competitive edge, he warned.
On the other hand, the monopoly of VINAPCO is also inevitable considering the high benchmarks set for this service.
It will not be practical to permit two or three companies to supply fuel at the airports.
The bottom line on this issue is that the government should let VINAPCO be independent of Vietnam Airlines.
The national flag carrier will then become just a client of VINAPCO like others.
Doanh said VINAPCO's independence would create a more level field for the aviation industry.
Setting up a watchdog tasked with monitoring competitiveness in the aviation industry would also be essential, he said.
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