Airport fuel suppliers “abusing dominant position”

Thursday 31 March 2016

The fuel firm that was pushing for more open competition over the La Collette Fuel Farm lease has been breaking competition laws by refusing to supply fuel to Aviation Beauport for resale and by charging them more than other operators, the regulator has ruled.

CICRA have investigated the market for aviation fuel after a complaint from Aviation Beauport, and have concluded that ATF – who operate the Airport fuel farm - have been breaking Jersey’s Competition Law, and say they may take further action by way of a fine or court action if ATF don’t change their procedures.

But the company say that the suggestion by CICRA is unfounded – they have pointed out that since they started competing in the Jersey market, they have reduced heating oil prices by 20%, and that they cannot sell fuel to Aviation Beauport for resale because they don’t have a licence to sell it on.

ATF Head of Operations Jonathan Best said: “This is not a question of ATF not wanting to supply fuel. It is a question of being able to supply this fuel in compliance with competition law and our own legal responsibilities to public safety.”

Mr Best added that ATF had “grave concerns” that CICRA is not acting effectively or fairly, and hinted that the company would pursue legal action to “strenuously protect our reputation and integrity”.

ATF’s fundamental disagreement with CICRA raises the prospect of a battle with the regulator – CICRA have said they may take action if nothing changes, and ATF say that their stance is completely justified.

Earlier this month, ATF were caught up in the political row over the La Collette Fuel Farm when they launched a late, unsuccessful campaign to stop the renewal of the lease of the site to Rubis. The lease was eventually renewed for ten years, but Infrastructure Minister Eddie Noel added safeguards in a new operating agreement to ensure that CICRA can rule on disputes over charges made for use of the facility.

In a statement attached to CICRA’s public finding, their Chief Executive Michael Byrne said: “ABP has been prevented from offering a bundle of services that included the provision of aviation fuel to its customers who have, consequently, seen their choices restricted.

“ATF used its position to prevent ABP’s customers from making alternative arrangements for purchasing fuel at Jersey airport, obliging them to make their fuel purchase arrangements exclusively with ATF when this service could also have been provided through a bundle of services provided by ABP.   

“ATF also unfairly discriminated in its pricing in respect of sales of Jet A1 aviation fuel to ABP - one of the largest buyers of aviation fuel at Jersey airport and a potential reseller of that fuel.

“It did this by charging ABP higher prices than other comparable customers. This has caused harm to the business by requiring it to pay higher prices for its fuel than would otherwise be the case.”