Jet fuel: Minister meets airline operators, to address marketers today

The federal government said it is considering granting a discount on the debt owed by Airline Operators of Nigeria (AON) who have also demanded an explanation from oil marketers over a 300 per cent rise in aviation fuel. They made their position known during a stakeholders’ meeting convened in Abuja on Wednesday by the minister […]

The federal government said it is considering granting a discount on the debt owed by Airline Operators of Nigeria (AON) who have also demanded an explanation from oil marketers over a 300 per cent rise in aviation fuel.

They made their position known during a stakeholders’ meeting convened in Abuja on Wednesday by the minister of aviation and aerospace development, Festus Keyamo.

Addressing journalists on the outcome of the meeting, the minister disclosed that the President is fully aware of the matter and is taking steps to address the issue.

However, there is no decision yet on the astronomical rise in the price of aviation fuel also known as Jet A1 for which the airlines earlier threatened to shut down on Monday.

The proposed shutdown was shelved following the intervention of the federal government with the Aviation Minister calling a stakeholders’ meeting today.

While the airline operators were powerfully represented, only a handful of fuel marketers were in attendance while the permanent secretary in the ministry of petroleum resources, Mrs. Patience N. Oyekunle represented the Ministry.

Keyamo while briefing newsmen after the meeting said the President is considering a discount on airlines’ debt to cushion the hardship being faced by the airline operators.

He said, “I had the privilege of meeting Mr. President to brief him about the meeting, and Mr. President mandated us to quickly bring a formal request in writing first thing tomorrow morning, and the first request that he will consider and grant is a generous discount on the debts the airlines are owing the aviation agencies. 

“So Mr. President specifically told me not to wait for a council memo that I should bring the letter to him as early as possible tomorrow, the percentage of discounts and all that, Mr. President will decide because he is so concerned about what is happening. And he asked me, in particular, to express his deep appreciation to the airline operators. He knows the conditions under which we operate and thank you for not raising your prices despite all that has happened. 

“The second request Mr. President has asked that we should bring for him to fully consider and grant is that he wants to set up a committee to address the issues of levies, taxes and fees on domestic tickets once and for all. This request has been on for a long time, So Mr. president will put the team together, and he will give them a deadline to report to him as quickly as possible on the fees the government fees and charges and levies that we can take off domestic tickets for now to give respite to Nigerians who are also buying tickets.

“And of course, he will consider a date for the airline operators to meet him one on one for the other, more robust discussions regarding access to capital and all of that.” 

Also speaking, the permanent secretary at the ministry of petroleum resources, Mrs. Patience N. Oyekunle said the deliberations were fruitful, noting that discussions with oil marketers will continue on Thursday.

“So at this point, since this is an urgent matter on the table, there is the suggestion and the agreement that the marketers will be invited here tomorrow for us to continue this deliberation, and hopefully come tomorrow, by 4pm tomorrow, we would have some of these issues resolved. So that is where we are from the side of the Ministry of Petroleum Resources. So we’ll get the marketers and engage them and also hear them, and by tomorrow, we hope to have resolutions to some of the issues that have been raised here today.” 

Speaking on behalf of the Airline Operators Association of Nigeria, the Chairman of Air Peace, Allen Onyema said the reason for the meeting was because of the astronomical rise in Jet A1 fuel in Nigeria. 

“We consider that not to be proportionate with the cost of or the rise in the cost of crude oil all over the world. In the world, the standard is, if crude oil rises by 10% the byproduct of crude oil should rise by proportionate raise in the pricing. But in Nigeria, after the strait of the Hormuz blockade, instead of rising by 20% Nigeria, Nigeria’s own increased by about 300% and these airlines are bleeding. We are bleeding,”

Speaking on the threat to shut down operations, “Yes, we threatened to shut down, not because we wanted to shut down, but because we had no money anymore, any longer to continue to borrow money from the banks just to pay for fuel and neglecting other things that are supposed to be done in the aviation industry. And you know very well that aviation preaches utmost safety, and we don’t want to shorten safety. So we decided that instead of not having money to do other things like maintenance, but only to be buying fuel that we needed to shut down, we appreciate this government.” 

While demanding explanations on the increase in Jet A1, he demanded for outright debt waiver from the federal government as well as access to credit at single digit rates.

“We are also appealing to Mr. President as a succour to the airlines, to waive the debts these airlines owe. Also, the truth is that the marketers must be brought to book to explain how they got about the 300 per cent increase when even Dangote is even surprised, because what he is selling to us still remains the cheapest, and some of them lifted from there. So why the astronomical rise? Thankfully, we are going to meet with them tomorrow.

“But the most important thing is that we appreciate the president for coming to our rescue, but we want to say that instead of the president deciding which discount to give us, we are asking for a total waiver. Because airlines, we’re asking for total waiver of all the debts we owe, and at the same time, a suspension of further payment until Strait of Hormuz is opened

“Also, we ask Mr. President to please fund the Bank of Industry. That is the only bank that is still doing single digit or at least 10% interest to airlines, but they don’t have funds now, Mr. President should please help us to fund the Bank of Industry very well,” he added.

 

…Nigeria’s ICAO rating hits 91 per cent

 Meanwhile, Keyamo also announced that Nigeria’s International Civil Aviation Organisation (ICAO) has now been upgraded to 91.4 per cent.

“The last ICAO audit was conducted in 2023 as it is done every three years. Our rating three years ago was 71 per cent which was considered low. Today, I can announce that we have now been upgraded to 91.4 per cent which increase our credibility even internationally,” he said.