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Oil Marketers, Airline Operators Disagree Over Price Of Aviation Fuel

Published

3 years ago

May 20, 2022.

Yinka Akanbi

While marketers have defended the fuel price, airlines have insisted that it is too high, accusing marketers of exploitation
The entire situation has led to increases in airfares

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EKO HOT BLOG reports that Nigerian airline operators are currently at loggerheads with oil marketers over the rising prices of JET-A1, also known as aviation fuel.

While marketers have defended the price, which is as high as ₦600 per litre, airlines have insisted that it is too high, accusing marketers of exploitation.

As a result, airlines have threatened to shut down, forcing the state oil firm, NNPC Ltd., to intervene by importing two cargoes of the product and selling at lower prices to cushion the effect of high operational costs on airlines.

The entire situation has led to increases in airfares.

The Chairman, United Nigeria Airlines and Spokesperson of Airline Operators of Nigeria, Obiora Okonkwo said that the current price was too high.

He insisted that the price of aviation fuel per litre should not go as high as it was currently being sold.

He said, “For a country like Nigeria that currently does not have internal production, this fuel is a deregulated product, and the supply comes from outside Nigeria and it is also being determined by the oil market internationally. So, oil prices jumping from $60-$70 to $110-$120 expectedly should affect the price. With that, we don’t have any problem. We are not holding the government accountable for anything.

“This is not the issue. We know that these prices have international influence. It is also a very transparent market, whereby you will know using the pricing formula based on the existing oil price internationally at that moment. However, we know if that is applied vis-a-vis the pump price of getting this Jet A1 in Nigeria, there is something wrong. That is the issue.”

On his part, a former Chairman of the Major Oil Marketers of Nigeria and Chairman, 11 Plc, Tunji Oyebanji said that the NNPC was able to sell at a lesser price because it could access the foreign exchange.

The state oil company had sold the two cargoes it brought in a few weeks ago at ₦432.6/litre and ₦462/litre respectively, while marketers sold to operators at ₦540/litre.

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In a bid to cushion the effects of the scarcity and high price, the House of Reps said it had entered into an agreement with Oyebanji who, a few weeks ago, had six million litres in his tank.

Oyebanji said he had offered to help by bringing down the cost, selling to airlines at ₦480/litre. However, prices soon shot up after his six million stock got exhausted.

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