Will airline ticket prices rise with the import of jet fuel?

Yesterday, Ecopetrol President Ricardo Roa announced the import of 100,000 barrels of fuel due to the contingency that occurred in the sector last week due to a failure in the Cartagena refinery on August 16, which affected the distribution of the limited resource in the country’s various airports. With this precedent, the door would be open for the import of fuel, and thus the question arises: will ticket prices become more expensive?

You can read: Crisis due to shortage of airplane fuel has led to higher ticket prices

According to Roa, this fuel that will arrive between August 31 and September 2 will be between 8% and 10% of the existing demand and taking into account the differential with the national product, at around 10 dollars, The impact on fuel prices would be only marginal. It is worth remembering that the national price per barrel is 95 dollars and the international price is around 105 dollars.

Currently, the airline industry demands around 37,000 barrels per day to meet existing operations, however, Ecopetrol foresees that with the expansion of more routes and the arrival of more airlines, This demand will grow to 41,000 barrels per day in two months, a need that the country cannot meet.

Read: Aerocivil’s notice: it will not accept flight cancellations due to fuel issues

The Cartagena refinery is supplying 13,000 barrels per day of the existing demand and the remainder, that is, 24,000 barrels, are provided by the Barrancabermeja refinery. According to Roa’s calculations, This is the limit they are able to produce.. In this way, the emerging demand will have to be met through import.

In conclusion, although the current import, being a moderate increase and in small quantities, does not contemplate a real impact on the basket of costs of the airlines, as this demand increases, and with greater imports, ticket prices could be affected, This is taking into account that fuel accounts for nearly 40% of airline costs.

See also: ‘There is enough jet fuel to operate without problems for at least five days’: Ministry of Transport

How much did the increase in ticket prices affect the ‘crisis’?

With the cancellation of more than 69 flights yesterday and the uncertainty that this situation generated, prices have risen by double digits. According to the tourism portal Viajala, the Bogotá – Cartagena route, compared to the previous week, had an increase of 15% in its prices up to $352,800 (round trip); on the Bogotá – Montería route they increased by 8% ($432,300); on the Bogotá – Bucaramanga route there was also an increase of 8% ($346,600); on the Bogotá–Pasto route it was 6.5% ($541,700); on the Bogotá – Valledupar route the price increase reached 9.5% ($575,000), while on the Bogotá–Leticia route there was a decrease of 4.5% ($682,000).

See: More than 100 flights have been cancelled due to fuel shortages in the country

Despite the situation, the Civil Aeronautics confirmed this morning that flights are operating normally and there are no cancellations due to this reason.

Paula Galeano Balaguera
Portfolio Journalist