Friday , 7 October 2022

Jet A1: NNPC to grant airlines license for Jet fuel importation

  • Airlines, marketers agree N500/litre for 3 days as one-way ticket price may go for N120,000

AIRLINES would be given licenses by the Nigeria National Petroleum Company (NNPC) to import Jet A1 also known as Jet fuel so they can have a way of benchmarking the sales of other customers and also bring in cheaper products to support their operations.

This is rising from a demand by the Chairman of Air Peace, Chief Allen Onyema that airlines that acquire aircraft for billions can equally import the product that run these jets if they are given the licenses.

Jet A1 also known as aviation fuel is one of the mainstay of airlines business as it accounts for over 40% of operational cost, the product in the last month has however been difficult to get and when available the price per litre has been expensive.

Group Managing Director (GMD), NNPC Ltd, Mele Kyari who reacted to the airlines’ petition informed that the airline operators would be given licensees to import vacation fuel as requested by Chief Onyema. READ ALSO: Jet A1 skyrockets, hits N599 per litre in Lagos, N607 in Kano as airlines groan over commodity price, availability

Kyari said: “As requested by the Airline Operators Association of Nigeria, they will be granted a license by the authority to import petroleum products, particularly ATK so that they can have a way of benchmarking the sales of other customers and can also bring in cheaper products whenever it is possible”.

However, the current crisis with the product’s availability and pricing is not settled entirely NNPC GMD said the company engaged with Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Marketers Association of Nigeria (DAPMAN) and the airline operators fixing the price of Jet A1 at N500 per litre for three days after which a substantive price would be fixed.

They agreed that after three days’ time, their representatives will sit down and agree on a transparent base for pricing.

The NNPC GMD said, “They will have a referenced exchange rate for the Naira so that anyone can compete. They will also agree on a premium, which currently differs from Customer to Customer, depending on the volume you buy and the credit level. These are the things they can negotiate in three days and close so that going forward, there is a transparent decision on pricing.

“We have seen where some people are selling at N445 and some are selling at N630. This will completely bring close such that you will not see these differences.

“We also agreed that in the interim, between now and the three days that have to close negotiations, (the lowest price we have seen as at this morning was N445 and a high of N605.

“There is a trader that is selling at N630 and we don’t think this is normal and so, we discounted it, we agreed that they will sell at N500 in the next three days and after that, they will switch to the new price that everyone can assess”.

In the meantime however, operators say the least ticket will cost N120,000 for economy seat as they expected a fixed interim price at N200 per litre

Chairman, Air Peace, Allen Onyeama who reacted said, the airlines have agreed to experiment with the price for three days while negotiations between stakeholders last.

He disclosed that the cost of airline tickets would still be on the high side until everything is resolved:“From what is happening, sir, if it continues this way, the least ticket will be about N120,000 for the economy seats and we don’t want to do that.

“We want to inform the house that we are demanding that we should be given licences to import this fuel. If we can buy jets that cost hundreds of billions of dollars, we can afford to import this fuel.

“The legislators fought for the Customs waivers on imported aircraft, aircraft spares and for the airlines to have sustainable operations. So, we owe you huge gratitude, together with the resident of this country who signed it into law.

“We thank the GMD for wading into this. Even though at N500, our unit cost per seat will now be about N85,000 barely insurance and other things. That is our pain. I wish we could buy this fuel at N200 so that Nigerians can afford to buy it.

“That is our predicament and so, the public should understand if there is a shift in what they are paying now and what they are going to pay later. Anybody can calculate it just as it has been done here, to buy 8000 litres of fuels at N500 per litre. How much will that give you for just one hour flight”.

On their part, the marketers said, there are various market forces at work when it comes to the pricing of aviation fuel.

Olumide Adeosun who spoke on behalf of the marketers said aviation fuel is the most volatile when it comes to pricing adding that, the marketers have been recording losses because of the way the price variations are done by suppliers.

He said: “We are grateful for your intervention. The last thing any marketer wants is to create a saturation where the general public has to pay far beyond what they can afford for any product.

In his closing remark, the Deputy Speaker, Ahmed Idris Wase, pleaded with the stakeholders to resolve the issue and reduce the suffering of aviation passengers in the country.

He said they would present their interim report on the floor of the House


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