Aviation fuel market set to take off

By V L Srinivasan

Muscat, May 8 - Increased operations of commercial airlines in Oman has fuelled the demand for aviation oil, which is expected to rise 5-10 per cent this year. The estimated sale of aviation fuel in 2008 was 325mn litres and 359mn l in 2009. This is expected to be between 390-400mn l this year.

Jet fuel in the sultanate is produced by Oman Refineries and Petrochemicals Company (ORPC) at Mina al Fahal and transported by road tankers and ships to the different airports in Oman. The dual purpose kerosene produced by ORPC is sold as Jet A-1 for aviation purposes and as domestic fuel for retail and commercial markets.

At present, three oil companies - Oman Oil Marketing Company (OOMCO), Shell Oman, and Al Maha - are engaged in fuelling aircraft flying into and out of the country. These firms also supply fuel to the Royal Air Force of Oman (RAFO) at its bases across the sultanate.

OOMCO is currently the major aviation fuel supplier at the Muscat International Airport, serving over 17 commercial airlines including Oman Air, British Airways, Gulf Air, Air Arabia, Saudi Airlines, Kuwait Airways and Royal Jordanian. OOMCO officials feel that aviation jet fuel demand will continue to grow, especially at the Muscat and Salalah international airports. The growth in demand will be spearheaded by Oman Air, which will be launching flights to around half a dozen new destinations around the world.

“The construction of new greenfield airports - Ras al Hadd, Adam, Duqm, Sohar - and expansion of Muscat and Salalah airports will potentially attract more activity, which in turn will increase the demand for jet fuel in future,” Ahmad Kamel Mahmud, general manager (aviation and marine), OOMCO told Muscat Daily.

According to the International Air Transport Association (IATA), Middle Eastern carriers recorded the strongest traffic growth, at 25.9 per cent, in March this year.

Shell Oman's aviation manager Redha Juma al Lawati said that the jet fuel business was expected to grow ten per cent this year. The company has a customer base of more than 15 airliners including KLM, Air France and Air India.

Shell has developed the 50-50 blend of synthetic gas-to-liquids (GTL) kerosene and conventional oil-based kerosene fuel. "The fuel, as an alternative to conventional oil-based kerosene, will contribute to diversification of aviation fuel supply. It also burns with lower sulphur dioxide and particulate emissions than conventional oil-based kerosene, making it attractive for improving local air quality at busy airports," he said.

Al Maha, which is the other company in the aviation fuel business in the sultanate, also hopes to increase its sales by six per cent on account of new customers this year. Though the company's sales volume increased by 27 per cent in 2009 on account of increased consumption by its existing and new customers, revenue witnessed a reduction of 25 per cent in 2009, compared to 2008, due to the decrease in prices.