May 26, 2024

House of Reps order NNPC to sell Jet A1 at N480 per litre to airline operators

 

Oredola Adeola

 

The House of Representatives on Monday mandated the Nigerian National Petroleum Corporation(NNPC) to sell the six million litres of aviation fuel available at its depots at N480 per litre to the airline operators as a way of addressing the price hike of the petroleum products.

Femi Gbajabiamila, Speaker of House of Representatives, gave this directive when he joined other principal officers of the House in a session with the  NNPC, Central Bank of Nigeria(CBN), Nigerian Midstream and Downstream Petroleum Regulatory Authority
Airline Operators of Nigeria (AON), and other stakeholders as part of efforts to resolve critical issues facing airline operations in the country.

 

The House charged the two government agencies to provide the required assistance to the airline operators. Directive was also given to the NNPC to enable the airline operators to name fuel marketer of their choice to supply them aviation fuel over the next three months.
The House asked major oil marketers to begin the process of application for licenses to import aviation fuel without intervention by middlemen.

Gbajabiamila lamented that since the last meeting between the airline operators and the House, there had not been effective communication as to the resolution of the issue. A development he claimed is responsible for the recent threat by the airline operators.

He added that although the strike had been called off, the nation did not need to wait for threats of strikes to nip them in the bud.

Mr Allen Onyeama, Chairman, Air Peace, who represented the airline operators, in his reaction claimed that the sale of aviation fuel at N500 per litre was still on the high side.

He noted that aviation fuel cost should not take more than 40 per cent of airline operators total operating cost.

Alhaji Abdulmunaf Sarina, Chairman, Airline Operators Association of Nigeria who is also the Chairman, Azman Airline, noted that 75 percent of aviation fuel was imported by Duke Oil, a wholly owned subsidiary of the NNPC.

He added that as a palliative, the NNPC should supply the 25,000 tonnes of aviation fuel promised to the operators which was  earlier approved by President Muhammadu Buhari.

He observed that an earlier resolution on aviation fuel price reached with the operators was not implemented.

Group Managing Director of NNPC Ltd., Mr Mele Kyari, however, countered that the agreed price of aviation fuel was not implemented because of price volatility.

Kyari added that going by market forces, the price of aviation fuel could be as high as N700 per litre, adding that the way out was for the government to subsidise the price.

He noted also that accessibility to Foreign Exchange was another constraint faced by airline operators.

CBN Governor, Godwin Emefiele on his part said oil theft in the Niger Delta was exacerbating the unavailability of Foreign Exchange.
He said that the CBN had no Foreign Exchange to aviation operators and that since the landing cost of aviation fuel was N460 per litre, the price would come to N550 per litre at the pump.

Emefiele said that the CBN would not grant any concession because it would amount to giving subsidy to aviation operators.
He said that there was a need to look at the pricing structure that the operators were talking about, adding that the situation was getting attention from the Presidency.

“I compelled some fuel marketers to take the loss and to sell aviation fuel at N480 per litre after getting a call from the Chief of Staff to the President that the operators were planning a strike and I promised to intervene,” Emefiele said.

 

Engr Farouk Ahmed, Chief Executive NMDPRA assured the  airline operators that the Authority will play its part in ensuring that aviation fuel is constantly available at a reasonably fair price.