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Aviation fuel scarcity: We may ground planes for safety reasons, says NCAA

Aviation fuel scarcity: We may ground planes for safety reasons, says NCAA
March 11
10:21 2022

Airline operators in Nigeria have alleged that some marketers are hoarding aviation fuel, also known as Jet A1.

They said the marketers are causing artificial scarcity of the product in the country.

The operators said this on Thursday during a hearing by the house of representatives’ ad hoc committee investigating the scarcity of aviation fuel.

They also expressed worry over the safety of airlines in the wake of aviation fuel price hikes.

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They said they were struggling to maintain their jets as fuel now took a large percentage of operating costs.

TheCable had reported how Nigerian airlines informed passengers to expect possible flight disruptions due to the “prolonged scarcity of aviation fuel” and an increase in the product price.

According to NAN, Allen Onyema, chief executive officer of Air Peace, who spoke for airline operators, told the committee that within two weeks, the price of aviation fuel moved from N190 per litre to N670 per litre.

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Onyema said the operators would have shut down operations if not for the political season and to support the current administration that had been supportive of the sector.

He said the operators could not survive the next 72 hours because they were indebted and risked takeover by the Asset Management Corporation of Nigeria (AMCON).

‘NO AVIATION FUEL SCARCITY’ — NMDPRA

However, Ugbugo Ukoha, executive director in charge of distribution systems for storage and retailing infrastructure, Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), claimed that the country had an excess supply of aviation fuel.

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According to him, Nigeria has an excess supply of aviation turbine kerosene (ATK), also called aviation fuel.

Ukoha also accused the Nigerian Civil Aviation Authority (NCAA) of not being sincere about the state of things in the sector.

He said the country had 34 days’ sufficiency of aviation fuel, adding that reports of scarcity are “false”.

Onyema, while responding to the presentation by Ukoha, said he was surprised with the claim that fuel was in abundance.

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He said that operators had been sourcing the fuel from marketers at an exorbitant price.

“To say that I am saddened by certain responses is playing it down. The product is not available, I am surprised that he (Ukoha) is saying there is sufficiency that will last for 34 days,” Onyema said.

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He urged the house of representatives to intervene to make the price of ATK reduced to a minimum of N200 per litre.

In his remarks, Idris Wase, deputy speaker of the house of reps, berated Ukoha and accused him of being used to blackmail the government in a political season.

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Wase, who chaired the hearing, warned that no one would blackmail the government.

“As a politician, I want to tell you that I am concerned, we are moving into an election period, nobody should blackmail our government,” he said.

He said the surge in price was a sequel to hoarding by marketers and the negligence of the regulatory authorities to do their work.

Wase also blamed Babatunde Irukera, executive vice chairman of the Federal Competition and Consumer Protection Commission (FCCPC), for not monitoring the activities of the ATK marketers.

NCAA CONSIDERS GROUNDING AIRCRAFT 

Musa Nuhu, NCAA director-general, said the hike in the cost of jet fuel has caused the authority to consider stopping airlines from operating to avoid air mishaps.

“Considering the cost of air tickets now, the airline industry cannot survive. It is either we shut them down because they cannot generate enough revenue to operate safely,” Nuhu said.

“We are not even talking about cancellations and delays; we are talking about the safety of flight operations.

“It is the responsibility of the Nigerian Civil Aviation Authority and I am fully responsible for the safe operations. We hope the honourable House can help us find a solution to resolve this matter. Aviation is critical to the economy of Nigeria.”

The NCAA boss said that if the aviation sector were to crash today, many other sectors of the economy would stop operations in a matter of time.

On his part, Mele Kyari, group managing director, Nigerian National Petroleum Company Limited (NNPC), said the request by the operators to reduce the price of ATK to N200 per litre would not be possible.

He said that the current landing price of the product was above N400 per litre.

“I can confirm that there is enough supply. Yes, it might be in the wrong hands or the wrong places. We are going to do everything we can to address the situation,” Kyari said.

“However, regarding the request by the airline operators to bring down the price to N200, let me say that will not be possible.

“It is not possible because the landing cost of jet A1 now is N480 per litre. Except if we are going to subsidise it, the price cannot come down to N200.”

The lawmakers asked Ukoha to provide a list of all licensed marketers for a meeting with the committee on March 14.

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