Bangkok: BAFS (Bio-Israeli Fuel Services) reports that the ongoing conflict in the Middle East has led to a substantial daily loss in aviation fuel sales, ranging from 1 to 1.4 million liters.
According to Thai News Agency, BAFS attributes this decline directly to the US-Iran conflict, which is adversely affecting its aviation fuel services. The company has also warned of potential airfare increases expected in April due to these disruptions. In response to the challenges, BAFS is planning to expand its pipeline fuel transportation business, with an ambitious goal of transporting up to 2.4 billion liters annually by 2027.
M.L. Natthasit Diskul, Managing Director of Bangkok Aviation Fuel Services Public Company Limited (BAFS), shared that the company's aviation fuel sales targets for 2025 and 2026 were initially set at 5.3 billion and 5.5 billion liters, respectively. However, due to the conflict's impact, these targets are under review. The conflict has notably affected three groups of airlines: those directly involved, such as Israeli and Iranian airlines, have seen an 84% drop in fuel sales; airlines using the Middle East as a hub, such as those in the UAE, have experienced a 77% decrease; and airlines flying across the region, such as routes to London and Zurich, have seen a 6% increase due to longer flight routes. Overall, aviation fuel sales are down by 1 to 1.4 million liters daily, potentially resulting in a monthly revenue loss of 20 million baht if the conflict persists.
M.L. Natthasit also highlighted the dramatic increase in jet fuel prices, which have risen from over US$90 to over US$200 per barrel. This surge is expected to lead to higher airfares in April. Travelers considering Songkran holiday trips are advised to book flights promptly to avoid increased costs. Amidst the volatile energy landscape, BAFS is diversifying by developing its pipeline transportation of oil. The company aims to transport 1.3 billion liters annually by 2025 and increase this to 1.5 billion liters by 2026. Completion of a pipeline connection between Saraburi and Ang Thong provinces with PTT is anticipated by 2027, potentially boosting capacity to 2.4 billion liters per year and increasing oil deliveries to the northern region by 60%.
In light of these challenges, BAFS is reviewing its expenditures, delaying investments, and reducing certain welfare benefits. Should the conflict continue, measures similar to those implemented during the COVID-19 pandemic, such as cutting executive salaries by 50% without impacting lower-level employees, may be enacted. Despite current difficulties, BAFS sees potential opportunities. Historically focused on oil, the company has ventured into producing refueling trucks for military use and aircraft. Additionally, BAFS is exploring renewable energy projects, including community solar and waste-to-energy initiatives in Surat Thani, with plans to increase production capacity from 50 to 60 megawatts by the end of 2026.