Airline operators in Nigeria have alleged that some
marketers are hoarding aviation fuel, also known as Jet A1.
They said the marketers are causing artificial scarcity of
the product in the country.
The operators said this on Thursday during a hearing by the
house of representatives’ ad hoc committee investigating the scarcity of
aviation fuel.
They also expressed worry over the safety of airlines in the
wake of aviation fuel price hikes.
They said they were struggling to maintain their jets as
fuel now took a large percentage of operating costs.
Recall that Nigerian airlines informed
passengers to expect possible flight disruptions due to the “prolonged scarcity
of aviation fuel” and an increase in the product price.
According to NAN, Allen Onyema, chief executive officer of
Air Peace, who spoke for airline operators, told the committee that within two
weeks, the price of aviation fuel moved from N190 per litre to N670 per litre.
Onyema said the operators would have shut down operations if
not for the political season and to support the current administration that had
been supportive of the sector.
He said the operators could not survive the next 72 hours because
they were indebted and risked takeover by the Asset Management Corporation of
Nigeria (AMCON).
‘NO AVIATION FUEL SCARCITY’ — NMDPRA
However, Ugbugo Ukoha, executive director in charge of
distribution systems for storage and retailing infrastructure, Nigeria
Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), claimed that
the country had an excess supply of aviation fuel.
According to him, Nigeria has an excess supply of aviation
turbine kerosene (ATK), also called aviation fuel.
Ukoha also accused the Nigerian Civil Aviation Authority
(NCAA) of not being sincere about the state of things in the sector.
He said the country had 34 days’ sufficiency of aviation
fuel, adding that reports of scarcity are “false”.
Onyema, while responding to the presentation by Ukoha, said
he was surprised with the claim that fuel was in abundance.
He said that operators had been sourcing the fuel from
marketers at an exorbitant price.
“To say that I am saddened by certain responses is playing
it down. The product is not available, I am surprised that he (Ukoha) is saying
there is sufficiency that will last for 34 days,” Onyema said.
He urged the house of representatives to intervene to make
the price of ATK reduced to a minimum of N200 per litre.
In his remarks, Idris Wase, deputy speaker of the house of
reps, berated Ukoha and accused him of being used to blackmail the government
in a political season.
Wase, who chaired the hearing, warned that no one would
blackmail the government.
“As a politician, I want to tell you that I am concerned, we
are moving into an election period, nobody should blackmail our government,” he
said.
He said the surge in price was a sequel to hoarding by marketers
and the negligence of the regulatory authorities to do their work.
Wase also blamed Babatunde Irukera, executive vice chairman
of the Federal Competition and Consumer Protection Commission (FCCPC), for not
monitoring the activities of the ATK marketers.
NCAA CONSIDERS GROUNDING AIRCRAFT
Musa Nuhu, NCAA director-general, said the hike in the cost
of jet fuel has caused the authority to consider stopping airlines from
operating to avoid air mishaps.
“Considering the cost of air tickets now, the airline
industry cannot survive. It is either we shut them down because they cannot
generate enough revenue to operate safely,” Nuhu said.
“We are not even talking about cancellations and delays; we
are talking about the safety of flight operations.
“It is the responsibility of the Nigerian Civil Aviation
Authority and I am fully responsible for the safe operations. We hope the
honourable House can help us find a solution to resolve this matter. Aviation
is critical to the economy of Nigeria.”
The NCAA boss said that if the aviation sector were to crash
today, many other sectors of the economy would stop operations in a matter of
time.
On his part, Mele Kyari, group managing director, Nigerian
National Petroleum Company Limited (NNPC), said the request by the operators to
reduce the price of ATK to N200 per litre would not be possible.
He said that the current landing price of the product was
above N400 per litre.
“I can confirm that there is enough supply. Yes, it might be
in the wrong hands or the wrong places. We are going to do everything we can to
address the situation,” Kyari said.
“However, regarding the request by the airline operators to
bring down the price to N200, let me say that will not be possible.
“It is not possible because the landing cost of jet A1 now
is N480 per litre. Except if we are going to subsidise it, the price cannot
come down to N200.”
The lawmakers asked Ukoha to provide a list of all licensed
marketers for a meeting with the committee on March 14.
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