Airline operators on Tuesday said they were ready to withdraw their threat to stop flying if the price of aviation fuel (Jet A1) was slashed to N400 per litre or the federal government considers a financial bailout for them.
The President, Airline Operators of Nigeria (AON), Alhaji Abdulmunaf Yunusa, stated this at an emergency meeting with the Chairman, Senate Committee on Aviation, Senator Smart Adeyemi at the National Assembly, Abuja.
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The airline operators had, on Monday, said that they have only three more days to fly because of the rising cost as well as the scarcity of aviation fuel.
After the intervention by the House of Representatives on Monday, the airline operators, aviation fuel marketers, the Nigeria National Petroleum Company (NNPC) Ltd and other stakeholders agreed on an interim price of N500 for Jet A1.
But Alhaji Yunusa, who is also the Chairman of Azman Air, said despite the agreement, Jet A1 is still being sold for N670 per litre as of Tuesday.
He further disclosed that they would have loved to have the price as low as N200/litre, but because of happenings in the international market, they would agree to the tentative price of N400.
He said if urgent action was not taken by the federal government to save the stressful situation, airline operators will withdraw their services by Friday morning.
Alhaji Yunusa, who spoke along with the Chairman, United Nigeria Airline, Mr Obiora Okonkwo, said they cannot cope with the high cost of operation worsened by an upsurge in the price of aviation fuel.
He said, “Based on the cost component of airline operation in Nigeria today, the actual price for a ticket of one hour flight is N150,000 which is being subsidised to N50,000 per passenger.
“We are overburdened by this ticket subsidy and heavily indebted to banks with consequences of running out of business if required actions were not taken.”
Worried by the threat and pathetic situation at hand, Senator Adeyemi passionately appealed to the airline operators to give the Senate and by extension, the National Assembly a few days to wade into the matter through interface with the federal government.
He said the issue will be raised on the floor of the Senate during the plenary on Wednesday for the purpose of making the federal government to give the operators the expected bailout.
“Your threat to stop flying from Friday this week is too tough an order. Aviation is life and there is no way the Senate and government generally will allow such to happen.”
Uncertainty as marketers, operators fail to agree on new Jet fuel price
…meeting reconvenes today
There was uncertainty yesterday over the threat by the airline operators to shut down operations as the oil marketers and operators failed to agree on a new pricing template, Daily Trust can report.
A meeting of the Airline Operators of Nigeria (AON) and the aviation fuel marketers to develop a new pricing template for the Jet fuel, which has disrupted flight operations in the last few weeks ended without the two parties arriving at a favourable pricing framework.
The meeting, which was held yesterday physically and virtually had the airline operators and many fuel suppliers in attendance with the Executive Director, Distribution Systems, Storage & Retailing Infrastructure of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr Ogbugo Ukoha, coordinating.
Also at the meeting was the Group Executive Director, Downstream of the Nigerian National Petroleum Company (NNPC), Mr. Adeyemi Adetunji.
The meeting was a follow-up to the stakeholders’ meeting held at the instance of the House of Representatives where it was agreed that jet fuel would be sold at N500 per litre for three days while operators would be given licence to import fuel.
Chairman of United Nigeria Airlines, Chief Obiora Okonkwo who spoke on behalf of the airlines insisted that buying fuel for over N500 per litre is not sustainable, saying no Nigerian would be able to fly if the airlines increase ticket fares.
Findings by Daily Trust yesterday showed that aviation fuel sells between N570 and N607 per litre across the country.
A breakdown of the pricing across regions indicated that it was N570 in Lagos; N579 in Abuja and Port Harcourt and N607 in Kano.
But the Chairman/CEO of Nepal Oil and Gas Services Limited, Ngozi Ekeoma debunked the insinuation that aviation fuel marketers have become a cartel, saying the parameters for determining the price remain unambiguous.
She said, “Aviation fuel is not a cartel based product. The parameters for determining prices are there. As of today, a vessel costs $25,000 per day at the port. There is the marine cost, we have problems even loading the ATK (the jet fuel). We use trucks that run on diesel. This also adds to the costs. We will have to put all of these costs. For every litre, I am paying FAAN (Federal Airports Authority of Nigeria) N3:50k.”
However, both parties were asked to submit three names each of persons who would work overnight with the NNPC representatives to come up with a new pricing framework.
On the part of airlines, CEOs of Arik Air, Aero Contractors and the United Nigerian Airlines were appointed while the fuel marketers would be represented by Joseph Olanipekun; Farouk Mogaji; Samuel Ekpese for MOMAN as well as Yusuf Mohammed and John Abegunda for DAPMAN. Also, a representative of the Nigerian Civil Aviation Authority (NCAA) would be in attendance.
The meeting, however, agreed to reconvene by 4 p.m on Wednesday.
NACCIMA call for incisive policy implementation in the energy sector
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has expressed concern over the rising prices of petroleum products, particularly diesel and aviation fuel.
This hike, according to NACCIMA is possibly an effect of the ongoing conflict in Europe and made worse by a lack of domestic production to meet demand despite the existence of refineries.
National President of the Association, Ide J.C. Udeagbala pointed out that the implications for the Nigerian economy are far-reaching as the use of the products is entrenched in the production and transportation processes of both the public and private sectors.
“Nevertheless, we do not expect that the shutdown of flights over the scarcity of aviation fuel and the issues of the national grid to bring the economy to a standstill in the short or medium term, rather, with rising prices we expect rising inflation, further erosion of the purchasing power of the population and redistribution of wealth that plunges more of the population below the poverty line. This is the likely result of the private sector seeking to adapt and adjust to the new realities.”