The house of representatives has asked the Nigerian National
Petroleum Corporation (NNPC) to provide six million litres of aviation fuel to
marketers chosen by the airline operators.
It was part of the resolutions reached after meeting with the
Airline Operators of Nigeria (AON) and other stakeholders on Monday.
On Friday, the Airline Operators of Nigeria (AON) announced
plans to shut down operations from Monday over the high cost of aviation fuel.
The group complained that aviation fuel, also known as Jet
A1, has reached an all-time high of N700 per litre.
As part of the resolutions, it was also agreed that, as a
long-term solution, the airline operators must commence, the process of
securing a license for the importation of aviation fuel to avoid suspicion over
the landing cost of the product and other associated logistic issues.
Speaking at the meeting, Allen Onyema, vice-president of
AON, said the scarcity can be addressed if airliners are allowed to purchase
aviation fuel directly.
“We were told here at that last meeting that fuel would be
sold to us at N500 which we protested that it was still on the high side
because even when fuel was selling at N200 or N250, the operating cost was
about 40 per cent,” he said.
“It rose to N400 and N450, and that was when we were
alarmed, and you noticed that everybody tweaked his inventory when we now
raised our base fare to about N50,000, which did not address the matter.
“We were invited to the house, and when we came here, it was
reached that they would give us fuel at N500 within three days. That never
happened. We continued writing, and nothing happened.
“Much later, we were invited by the midstream and downstream
authority and we were told that the president approved 25,000 metric tonnes for
us as a palliative to help us. We were very grateful to the president. We were
happy. We were told to nominate marketers that would market this product for
us.
“We were told to have a meeting with these marketers. We
called all the marketers and held a meeting with them. We decided the
logistics, so they would take their logistical costs and everything, and at the
end of the day that fuel was getting to them, they told us at N335, so we put
everything together, and it would be getting to less than N400 for the cost,
and we said even if they sell to us at N450 it would be okay.
“We were told that a
week later that is when the consignment would be arriving in Nigeria and when
this happened, the next we got to hear from the marketers was that they had
already been given the consignment that we were all jostling for. So we waited
thinking that they would sell as agreed. They never.”
Onyema said the matter was reported to Mele Kyari, group
managing director of the Nigerian National Petroleum Company (NNPC) Limited,
but no action was taken.
“I called the MD of NNPC in the presence of our members. He
replied, saying there was no way there would leave us to get direct products
that was dangerous,” he said.
“With due respect, Mr Speaker, we were not striking. We did
not intend to go on a strike. It was not a strike. What AON was saying on
Friday when we released our communique was that we do not have the money
anymore to pay.”
Speaking at the meeting, Kyari said aviation fuel cannot
have a fixed price because it is a deregulated product.
“So you cannot hold unto any price and indeed what you have
seen in the media is N700 reference point. It cannot be a reference point. It
depends on the market condition. It can be higher than N700 depending on the
market. This market shifts. As we speak, it is closely related to the price of
crude oil,” he said.
“It is our role to
ensure we intervene. We did. We brought in products so that we can dampen the
price. In March and April, we brought in cargo and made it available to the
entire industry at N460. There is a build-up to that price. When the customer
takes marine at N435, he has to transport, he has to the charter vessel, bring
it to his depot, to his fuel station and transport it. So there cannot be two
same price in Lagos and Maiduguri.
We cannot fix the price. We cannot ask for N500. We cannot
say it must be below N600 or N700.
On his part, Godwin Emefiele, governor of the Central Bank
of Nigeria (CBN), said the apex bank has no control over the flow of the
dollar.
“We do not have FX to sell. It would be difficult for us to
grant any concession. It means we would be taking a hit or we would be
providing some sort of subsidy for the industry,” he said.
Femi Gbajabiamila, speaker of the house, said shutting
airline operations could cripple the government.
“We are at the precipice today in Nigeria. It is a crucial
moment for us. There is a crisis at hand. The shutdown of airline operations
has the potential of shutting down this government. We cannot sit here as
stakeholders and fold our arms and watch this happen,” he said.
While appreciating all the stakeholders for the efforts put
in at resolving the issue at stake, Gbajabiamila thanked the airline operators
for being nationalistic in calling off the strike.
“I hope that the outcome of this meeting will usher in a
lasting solution to these challenges of Jet A1 bearing in mind that there is a
laissez-faire economy of demand and supply,” he said.
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