Aviation: Marketers, Operators disagree on new jet fuel price

The crisis in the aviation sector may have worsened as Oil marketers and operators failed to agree on a new pricing template, it was learnt.

The development means that airline operators may still go ahead with the threat to shut down operations following the skyrocketing price of aviation fuel known as Jet A1. 

Airline Operators of Nigeria (AON) and the aviation fuel marketers had met to develop a new pricing template for the Jet fuel, which has disrupted flight operations in the last few weeks, but the two parties after their meeting ended up not arriving at a favourable pricing framework.

The meeting was held physically and virtually and 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.

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Equally at the meeting was the Group Executive Director, Downstream of the Nigerian National Petroleum Corporation (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 license to import fuel.

To come up with an acceptable pricing template, the AON and the fuel marketers represented by the Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and the NNPC representatives met and both parties made their positions known.

Speaking on behalf of the airlines, the Chairman of United Nigeria Airlines, Chief Obiora Okonkwo, maintained that buying fuel for over N500 per litre is not sustainable, insisting that no Nigerian would be able to fly if the airlines increase ticket fares.

Okonkwo argued that aviation is a social service and the shutdown would affect every sector of the economy, stressing the need for any form of intervention from the federal government to avert the looming crisis.

Currently aviation fuel sells between N570 and N607 per litre across the country.

Speaking, 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.”

At the end, both parties were asked to submit three names each which 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.

Ukoha who stated that the team would work overnight to agree on a new price said, “First is that before the end of today, we will revisit the issue about yesterday’s decision that wasn’t abided with today. You will hear from us.

“By tomorrow, we can come up with figures that are agreeable to everybody upon which we can base the framework.”