Oil marketers fault airline operators over aviation fuel price


Oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have faulted airline operators’ claim of buying aviation fuel at N700 per litre.

The airline operators, under the aegis of Airline Operators of Nigeria, AON, had cited the high cost of aviation fuel of N700 per litre as a major reason for the proposed strike action scheduled to commence yesterday which was suspended following the appeals by the Federal government and other stakeholders.

However, in a swift reaction, MOMAN Executive Secretary, Mr Clement Isong faulted the N700 per litre claim saying the association is not aware of anywhere in the country where aviation fuel is sold at N700 per litre.

Responding to media enquiries on the issue, Isong said: “I am not aware that aviation fuel is sold currently anywhere at N700 per litre. There has been an intervention by the Nigerian National Petroleum Company Ltd., which is now bringing in ATK.

“It gets into the tank, all costs together, at about N500 per litre. If we use the local airport at Ikeja as a benchmark, it is sold between N540 and N550 per litre.

“Nobody with common sense will go and bring in ATK now that NNPC is bringing in and selling it cheap. NNPC is bringing in the product because it is swapping it with crude and when it swaps it with crude it uses the Central Bank of Nigeria exchange rate of N419 to a dollar.

“Meanwhile the product is deregulated. So no normal person can go and get it at that exchange rate. You cannot use N589/$ (black market rate) to bring in the product and sell at N550 per litre.”

He added that the intervention by the NNPC has discouraged marketers from importing aviation fuel because it will be a bad business decision.

“ATK as a product is handled very carefully. It is continuously filtered. It is carried by special trucks, so there are extra handling costs.
“Even with these costs, it is sold at the tarmac between N540 and N550 per litre in Lagos and by the time you carry it all over the country including transportation cost, it will be sold at about N570 or N580 at the farthest airport from Lagos. There is nowhere that aviation fuel is sold at N700 per litre,” the Executive Secretary said.

He said inquiries made by MOMAN also showed that aviation fuel was cheaper in Nigeria compared to other West African countries.
“In Ghana, aviation fuel is sold at Platt, North-Western Europe, plus premium or minus at 1.25 dollars per litre.
“In Liberia and Sierra Leone, it is selling at 5.70 dollars per gallon, which translates to 1.51 dollars per litre. So, those are your West African prices.
“Now, if you want to translate that to Naira, if you are using the NNPC price which is N540, that is cheaper and even if you use the N700 they are claiming, it is still cheaper.

“We are not selling it at N700 per litre because of the NNPC intervention. It is actually about 90 cents per litre with the NNPC price.”

Isong, however, empathized with the airlines, the Federal Government and ordinary Nigerians who are struggling with the consequences of the increment in the price of crude oil at the international market.

He blamed the hike in the price of crude oil and its derivatives such as aviation fuel, petrol, diesel and kerosene on the ongoing conflict between Russia and Ukraine.
“The airlines know what they want, which is justification to increase their air fares. It is not only aviation fuel that has gone up, even though it is a contributory factor.
“Cost of operation has gone up; there is inflation and anybody doing business will tell you that they are struggling. All businesses are struggling including the airlines.

“So, maybe they are looking for a bailout from the Federal Government because everybody needs some kind of bailout at the moment,” he concluded.

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