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Aviation fuel crisis: Airline cancels flight, as AON again threatens strike

- Aviation fuel price may rise - NNPC, MOMAN - Airlines fail to confirm if the N480 per litre agreement has begun - Expert proffers solutions to the problem

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An airline has cancelled flights, even as the Airline Operators of Nigeria (AON) has again threatened to disrupt flights over aviation fuel scarcity.

Checks today  by The ICIR revealed that a Dana Air 9J357 flight scheduled to arrive at the Abuja Nnamdi Azikiwe International Airport at 7:15pm was cancelled.

Another Dana Air 9J358 flight scheduled to depart the Abuja Nnamdi Azikiwe International Airport by 8:10pm was also cancelled.


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This was based on data gotten from an online airline resource, FlightRadar 24.

Dana cancels flights on May 16. Credit: Data mined by Joseph Olaoluwa from Flight Radar for The ICIR.

Just last week, Dana Air had issued an advisory on May 11, 2022, promising to avoid flight delays.

On Monday, May 16, 2022, the AON, in a statement, explained that the scarcity was impacting operations and could lead to rescheduling or cancellations, as the case may be.

“The Airline Operators of Nigeria (AON) wish to alert the public of impending disruptions to scheduled flight operations of members of the association. This development is being forced on members by the growing scarcity of aviation fuel, popularly known as Jet-A1.

“The scarcity is impacting negatively on the seamless conduct of air transport operations and would lead to flight rescheduling, and/or cancellations.

“However, the association and its members are working very hard, and in alliance with product marketers, government and relevant stakeholders to ensure availability and proper pricing of aviation fuel in the country,” the statement, signed by its spokesman, Professor Obiora Okonkwo, read.

Aviation fuel price may rise – NNPC, MOMAN explain

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The Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation (NNPC), Garba Deen Muhammad, exclusively told The ICIR that the N480 per litre price of aviation fuel agreed last week at the House of Representatives was only for a consignment containing six million litres of aviation fuel.

Muhammad, who spoke in a telephone interview with The ICIR on May, 16, 2022, regarding whether the distribution of aviation fuel had commenced to the air operators, clarified that the NNPC does not directly supply aviation fuel.

He added that the airline operators were allowed to choose one marketer to supply the fuel at that price to them, with that volume of fuel to be supplied at N480 per litre.

He said, “The NNPC doesn’t directly supply aviation fuel. It is only a particular marketer that promised to supply aviation at N480 for the remaining six million litres that he has. The NNPC is not directly involved in that approach. Meanwhile, the marketers are the ones that decide who to supply them the product.”

Airlines which spoke to our correspondent last week refused to respond if they had gotten any shipment of the fuel at the agreed N480 per litre.

Calls and text messages to the spokesperson for Dana Air, Kingsley Ezenwa, were not replied to.

Similarly, the spokesperson for Arik Air, Banji Ola, when contacted, only promised to get back to our correspondent whether the fuel would be distilled at N480 per litre.

Arik Airline
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Last week, to find a stop-gap to the strike threatened by the operators on May 6, 2022, the AON, NNPC, and the Central Bank of Nigeria (CBN) reached a truce to end volatility in the price of Jet A1 fuel.

The meeting, chaired by the Speaker of the House of Representatives, Femi Gbajabiamila, agreed that some trusted marketers would distribute six million litres of fuel guaranteed by the government. This arrangement was for the short time solution for the next three months before the operators get the required licences to import the fuel themselves.

Next batch of aviation fuel to sell for N540 – MOMAN

The Chief Executive Officer of the Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong, who gave further insight into the situation, noted that two shipments recently came into the country at N332.6 and N362 per litre respectively.

Aviation fuel. Credit: ThisDay

Isong said the local logistics charges, inclusive of movement from a depot, transportation and charges to the Nigeria Civil Aviation Authority (NCAA), took the price of the one imported at N332.6 to N480 per litre. He stressed that it was only one firm that had this consignment and the next one would sell for higher than N480.

“One company was able to sell that product imported at N332.6 for N480 per litre after all the handling charges. It still has six million of that product left. That six million is what is selling at N480 per litre. Apart from that one, another was brought in by the NNPC, which has been sold to other people, but not to the first group of people (aviation operators). The handling costs and logistics costs were higher, and it is selling between N540 and N550 per litre in Lagos,” he told The ICIR in a telephone interview.

When asked why the price was on the rise, he revealed that the marketers were only given 15 per cent of the Central Bank rate and 85 per cent of the black market rate to purchase forex, hence the rising cost.

“The CBN governor said because of the oil theft, he does not have enough dollars to give to people. If you get your dollar, you have to buy at the black market rate. As long as that continues, there would not be enough forex and anything you buy with forex would be expensive. We all have to decide whether we want to fly or go by road.

“The airlines cannot allow the government to look after them, they would have to increase their price at some time or some people may have to reconsider air travel. Whose fault is it? It is what it is. There is simply not enough forex in the country. It is either there is no product or expensive products by expensive forex. Government cannot bear the cost when it doesn’t have the money anymore,” he explained.

Expert proffers solutions to the problem

An aviation analyst, Olumide Ohunayo, blamed the Federal Airports Authority of Nigeria (FAAN) and the NNPC for failing to rehabilitate the ruptured Ejigbo pipeline designated to transport aviation to the tarmac in Lagos.

Ohunayo said, “Since the pipelines ruptured around 1991, they have stopped using it and it is not the airlines that refused to use it; it is the airport. It only gets to the airline after it had gotten to the airports. So it is the airline authority that should work on it and return it to the airlines. It is the job of the airline authority and the NNPC. This has made it more expensive because of transportation.”

File Photo: Pipelines in the Niger Delta.

Ohunayo said it was essential to reduce the impact of middlemen in the purchase and final delivery of aviation fuel to the airlines as a solution to this perennial problem. He also stressed the need to look at the gap between the landing cost of JET A1 and the cost sold to the airlines.

“That margin is so high and marketers should not capitalise on the deregulation of aviation fuel to continue to profiteer from the Nigerian masses. No one is regulating this price difference,” he argued.

Author profile

Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org

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