Address aviation fuel scarcity

In the last few weeks, Nigeria’s aviation sector has been thrown into crisis following the scarcity of aviation fuel known as Jet A1. The scarcity brought with it skyrocketing prices, with the fuel selling for N570 in Lagos, N579 in Abuja and Port Harcourt and N607 in Kano. With this, travelling by air in Nigeria […]

In the last few weeks, Nigeria’s aviation sector has been thrown into crisis following the scarcity of aviation fuel known as Jet A1. The scarcity brought with it skyrocketing prices, with the fuel selling for N570 in Lagos, N579 in Abuja and Port Harcourt and N607 in Kano.

With this, travelling by air in Nigeria has become a grueling experience with rescheduling, delay or cancellation of flights becoming the order of the day. Hundreds of passengers have been stranded at various airports across the country. This is in addition to the high cost of tickets.

Tickets are now going for between N50,000 and N80,000 for economy class and for a flight that lasts barely an hour.

Various stakeholders’ meetings have been held on the issue. At the meeting with members of the House of Representatives, airline operators called on the Nigerian National Petroleum Corporation (NNPC) Ltd to grant them licence to import the product in order to avert a shutdown of the air space and stabilise the market.

Airline operators accused aviation fuel marketers of arbitrarily increasing the product’s price, adding that they refused to disclose the intricacies involved in the pricing and how they arrived at the hike. Stating that price hike to over N500 started in January, 2022, from its initial price of N200, chairman of the airline operators, Mr Allen Onyema, said if nothing was done, an airline ticket might rise to N120,000 in no distant future.

Despite the endless meetings, the Airline Operators of Nigeria (AON), NNPC Ltd and aviation fuel marketers have failed to develop a new pricing template or work out a price template of N500 per litre. There has also been no success on granting the airline operators’ license to import fuel.

With the obvious but unstated reality of deregulation of aviation fuel, there is no way its price will reduce to N200 per litre. There will surely be cyclical increases or decreases of the price, depending on the demand and supply push in the international crude oil market. And the situation is made worse because of the Russia-Ukraine war which has driven up prices of petroleum products, including petrol, diesel and Jet A1.

This situation is regrettable as many people who are supposed to travel for business and health appointments, among others, are stranded. It must be noted that unlike before, the rise of aviation fuel price at this point affects a major section of the population. This is because, due to the insecurity across the country, many people have resorted to air travel. But with this hike, they do not have any option than to return to the unsafe roads. Which is why we call for a solution to this crisis. It must not be allowed to linger.

What is clear is that NNPC Ltd has failed again to discharge its mandate, and sadly, its officials keep on explaining away their failures. Since the scarcity started, there has not been concerted effort to address the situation. This shows that we may have to look elsewhere for a solution to the crisis.

The airline operators should look into the option of signing binding and long-term contracts with oil marketers based on stated pricing formula instead of short-term search for marketers ready to sell aviation fuel at cheaper rates. This is what the international airlines are doing, thus guaranteeing them steady supply of aviation fuel. In addition, the federal government should consider the request of the airline operators to be granted licence to import the aviation fuel until local airlines can meet their needs.

The federal government should also urgently consider immediate intervention through the provision of foreign exchange at the official rate to oil marketers to bring in aviation fuel instead of sourcing from the parallel market which makes the price high. This is imperative as Nigeria needs stability in the aviation sector.

One question begging for answer at a time like this is this: what is the Federal Competition and Consumer Protection Commission (FCCPC) doing to address the development? As an agency saddled with the mandate to protect the interest of consumers, we call on it to intervene and monitor the activities of the aviation fuel marketers so that Nigerians get a better deal. This scarcity has gone on for too long; it is time to address it.