Rubis resumes fuel sales to Ogle airport operators

Rubis West Indies yesterday resumed supplying aviation fuel to Ogle Airport operators Air Services Limited and LIAT—just a day after suspending its supplies over the commingling of its product.

Rubis Aviation Sales Manager K Hutson Inniss confirmed to Stabroek News that the supplying of fuel to both companies resumed yesterday afternoon, while Chief Executive Officer of Ogle Airport Incorporated (OIA) Anthony Mekdeci suggested that the supplier acted out of concern over its market share, while also saying that its communication with the fuel handler was not the best.

Rubis’ action was as a result of the Caribbean Aviation Maintenance Services Ltd (CAMS), which is responsible for all the fuelling operations at OAI and is an agent of the dealer, commingling its fuel with purchases from GuyOil. CAMS, which has purchased from other suppliers in the past, has been purchasing fuel from GuyOil at a cheaper rate. Rubis had indicated that it was suspending its supply to Ogle until it was able to verify the integrity of the commingled fuel, prompting ASL to announce on Monday that it would likely be forced to ground its operations.

“I think in this case Rubis was more concerned about their market share and was rather surprised that fuel was brought from a local competitor of Rubis rather than from overseas and what had happened out of caution was that Rubis decided to check that fuel and check the procedures,” Mekdeci, however, told a press conference held at the CAMS office at Ogle International Airport yesterday.

“This is a normal process. If you take new fuel and you put it into your installation that is considered commingling. The real issue is the procedure—the fuel, where it comes from, the refinery, how it is transported, certificate fitness of the fuel, all these issues are part of a procedure which must be established by the fuel handling agent [CAMS] to determine whether the fuel met the exact standard of the fuel with which it is going to be commingled and it is. In this case it is a normal procedure for fuel handling facilities,” he added.

Mekdeci also said that that integrity verification went on all the time and that communication between CAMS and Rubis was not the most effective. He said that CAMS’ Director of Maintenance John Isaacs stated that the company has collected fuel from other suppliers previously and Rubis was aware. “…We followed the same procedure in term of verifying the integrity of the fuel,” he said, while noting that CAMS and Rubis have been in a working relationship for over 16 years.

Communications consultant for CAMS Kit Nascimento noted that the fuel handling agent would source fuel from other suppliers simply because of competitive pricing. He, however, did not reveal any additional suppliers other than local supplier GuyOil. He too noted that communication between Rubis and CAMS could have been better and that may have led to some confusion.

Nascimento also accused ASL of overreacting on Monday to the suspension and said that the airline was never out of a fuel supplier.

He said ASL presumably jumped the gun before clarifying what was actually happening, while noting that the operator at the moment has a fuel farm facility which it has failed to put into operation.

He said that currently ASL was required to pay a standard non-commercial fuel handling agent licence and also had to acquire liability insurance, which the company has failed to do. Nascimento noted that non-commercial licences were $1 million, while a commercial licence could be acquired for $2.5 million. He did not reveal the insurance cost but noted that liability insurance was expensive and “it appears that Air Services Limited is having difficulty in acquiring the insurance.”

At a press conference yesterday, ASL General Manager Annette Arjoon-Martins said that while the fuel farm construction began in late 2011 and was completed in December 2012, ASL did not find out about the necessity of fuel farm insurance until March of 2013. She noted that ASL was given several versions of fuel farm licences and costs associated, while adding that there were issues that had to be addressed and worked out between ASL and the OAI.

According to Arjoon-Martins, ASL sought coverage from Diamond Fire and General Insurance Inc, the same insurance provider used by CAMS, and was told that it could not provide such insurance due to treaty limitations. “We have irrefutable evidence that they [OAI] are asking us to comply with procedures that have not been approved by the [Guyana] Civil Aviation [Authority],” Arjoon-Martins stated.

“If you look at their 2007 Airport Manual, which has to be approved by the Guyana Civil Aviation Authority, you will see clearly that all of these requirements that they have been asking us every couple months are not in that manual,” she added.

She told reporters that on Friday ASL would be clarifying issues revolving around its US$1M 60,000-gallon fuel farm, which is currently sitting idle.

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