Airlines may Collapse as Aviation fuel hits N714 per litre
EMERGENCY DIGEST- There are fears that, at least, three domestic airlines may close shop in the coming months due to the continuous rise in the price of Jet A1, otherwise known as aviation fuel.
The Airline Operators of Nigeria (AON) has raised the alarm over the rising cost of Jet A1. As at yesterday, the product sold for N714 per litre across some airports. About 16 months ago, aviation fuel sold for about N200 per litre.
Speaking at the maiden edition of the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme: ‘Advancing the frontiers of possibilities for safe, secure and profitable air transport’, in Abuja, AON’s Vice Chairman, Mr. Allen Onyema, warned that if the challenge of aviation fuel was not nipped in the bud, more airlines might shutdown because many of them are going through very difficult times due to aviation fuel prices and other challenges.
According to AON, to address the challenge, the Federal Government had approved 10,000 metric tonnes of the commodity to the airlines, but the carriers were yet to access it.
Onyema explained that the airlines hoped to start lifting the product from today.
He said: ”That is why we ran to the government and the Federal Government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.
”Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of airlines in Nigeria.
”We have come to realise that there is little or nothing the committee set up can do because this is as a result of foreign exchange and the price of oil all over the world. The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased, even in London and other country. Our own is worse because of the increase in foreign exchange.”
In a related development, the lingering fuel scarcity that hit Abuja over two weeks ago appears to be spilling to other parts of the country.
Some filling stations in Lagos have restricted the sale of the commodity to few pumps in their outlets. For instance, along the Lekki-Ajah axis, some fillings were seen closing shops while the few that remained opened didn’t dispense from their pumps, resulting in queue build up.
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In Ibadan, the Oyo State capital, a resident expressed shock when he found queues building up in the metropolis. He said some filling stations had closed shops, while the few that are opened have unusually large number of vehicles.
A petrol attendant in one of the affected filling stations in Ibadan warned that the situation will get worse in the days ahead if urgent steps are not taken to tackle the buildup frontally.
However, a station manager of an NNPC retail franchise filling station in Lagos who pleaded anonymity also corroborated the looming scarcity fears. According to him, for a few days now, his trucks have been finding it difficult to load petrol in Lagos.
He explained that what may likely cause scarcity in Lagos and its environs may not be due to the unavailability of petrol, but the high cost of diesel used in transporting petrol and also used for running generators to power the filling stations in the absence of electricity. This, he said, is the bane.
“We had little difficulty to load petrol for some days. The depots are keen to increase the price of the commodity owing to some factors, but there is a strong resistance to that by government. I am aware that critical stakeholders are working round the clock to ensure that no increase or scarcity happens. You know government would not want to do anything that will cause dislocation in the country especially now that elections are building up,” the source explained.
Our source’s position may be right. As at yesterday, a litre of diesel sold for between N800 and N850 across the country. Although diesel has for long been deregulated, it is believed would continue to rise with the possibility of almost doubling at N1, 500 per litre in a forthnight if nothing drastic was done to curtail the current challenge faced by importers of the commodity.
When The Nation contacted the Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong, he said he was not aware of a possible scarcity rearing its head in Lagos or its environs. “As at today, I am not aware of such development happening in Lagos or its environs; but we can talk about this tomorrow,” he said.
In similar vein, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, explained that scarcity is not likely going to happen in Lagos and its environs. He said his members are very active in loading and supplying of the products across the regions.
“I doubt that there will be fuel scarcity because our members are loading and distributing fuel actively; so there is no need to worry about scarcity,” Osatuyi explained.
The General Manager, Public Affairs, NNPC, Garba Deen Muhammad, could not be reached as at the time of going to press. His mobile phone was “switched off.”
