Aviation crisis: NNPC intervenes as airlines lament three days stock of fuel

NIGERIAN airline operators have threatened to shut down their operations in three days if there is no reduction in the price of aviation fuel, popularly known as Jet-A1. 

This is even as the operators called on the Nigerian National Petroleum Corporation (NNPC) Ltd to give them licence to import the product in order to end the perennial hike in the price of Jet-A1. 

The chairman of Air Peace, Allen Onyema, who spoke on behalf of Airline Operators Association of Nigeria (AOAN), said this during the investigative hearing by the House of Representatives into the price hike of Jet-A1 by oil marketers on Monday. 

Onyema, during the investigative hearing presided by the Deputy Speaker, Honourable Ahmed Idris, said, “I wish to announce that if they don’t come down from their rooftop, we have only three days more to operate.” 

While noting that the cheapest ticket currently cost N70,000, the Air Peace chief said this might go up to about N120,000 unless steps were taken to bring down the price of aviation fuel. Onyema said if airline operators could import aircraft that cost millions of dollars, they would not find it difficult to import aviation fuel. 

In response to the request of the airline operators, the Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, said there were plans to grant licence to airline operators to commence importation of aviation fuel. 

At the hearing attended by Major Oil Marketers Association of Nigeria (MOMAN) as well as Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), it was agreed that the price of Jet-A1 be fixed at N500 per litre against the hitherto price of N670 per litre. 

Kyari said, “We know this is a very difficult situation. We know that once aviation fuel increases, prices of flight ticket will certainly increase and this can surely cost pains for Nigerians. That is why we are working with you to ensure that those pains are minimized to the barest minimum and one of the elements is the pricing of aviation fuel. 

“So, what we have engaged with MOMAN, DAPMAN and the airline operators is that in three days’ time, their representatives will sit down and agree on a transparent basis for pricing. That means that they ought to have a referenced benchmark that is quoted transparently in the market. 

“They will have a referenced exchange rate for the Naira so that anyone can compete. They will also agree on a premium which currently differs from Customer to Customer, depending on the volume you buy and the credit level. 

“These are the things they can negotiate in three days and close so that going forward, there is a transparent decision on pricing. This will no doubt throw up the actual value of the product in the market. You will no longer see these discrepancies we have seen where some people are selling at 445 and some are selling at N630. This will completely bring it close such that you will not see these differences. 

“We also agreed that in the interim, between now and the three days that we have to close negotiations, (the lowest price we have seen as at this morning was N445 and a high of N605. There is a trader that is selling at N630 and we don’t think this is normal and so, we discounted it), we agreed that they will sell at N500 in the next three days and after that, they will switch to the new price that everyone can access.” 

Speaking earlier during the investigative hearing, the Deputy Speaker, Hon. Ahmed Wase chided the authorities of Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) for failing in its responsibilities, saying: “You are supposed to regulate their (oil marketers) activities, are you just giving the licence? What are the minimum requirements; what is expected of that company that you are authorizing them to bring in this product; is it that they have the opportunity and then the leverage to tell you whatever rate they want and it has to stand? No, I don’t think so.”