Airlines face fresh fuel crisis as NNPC supply dries up

Airlines already feeling the impact have started delaying flights and increasing fares for flights across the country

One week after the Nigerian National Petroleum Company Limited (NNPC) intervened to resolve the aviation fuel crisis in the country, investigation shows that the supply from the NNPC has been used up and airlines are now grappling with price hikes amid scarcity.

Last week, the NNPC and domestic airlines, during a meeting with the House of Representatives, reached an agreement that the national oil firm would supply Jet-A1 to marketers nominated by airline operators for a period of three months at N480 per litre, pending when the carriers would be granted licences to import the commodity.

Airline Operators of Nigeria (AON) had said it nominated 10 marketers for the purpose.

BusinessDay’s findings show that airlines have exhausted these products and are back to buying fuel at higher prices.

A top oil marketer told BusinessDay in a phone interview that in February, when airlines first complained of fuel price increase, the product was made available to oil marketers at N432 per litre and after spending on logistics, oil markers sold to them at N480 per litre.

He said when the product became scarce, few companies still had fuel they bought at N432 but were selling to oil marketers at N540 per litre, taking advantage of the fuel scarcity.

The oil marketer explained that what the NNPC and the Central Bank of Nigeria did was to call these companies to sell the remaining fuel they had at N480 per litre to the airlines since they bought at N432, adding that when this was done, the companies had about six million litres only.

He said many airlines keyed into this opportunity and bought fuel at N480 per litre.

As of Monday, the product was sold in Lagos at N598 per litre, N642 in Kano, N640 in Kaduna, N627 in Abuja, N635 in Enugu and Anambra and N628 in Port Harcourt.

Airlines already feeling the impact have started delaying flights and increasing fares for flights across the country.

Sukhjinder Mann, deputy CEO of Dana Air, said the airline was again witnessing the scarcity of Jet A1 fuel across the airports in Nigeria, which he said had, in some cases, caused recent flight delays.

Mann however craved for the understanding of passengers.

Obiukwu Mbanuzuo, chief commercial officer of Green Africa told BusinessDay that the current fuel crisis was also affecting Green Africa despite its usage of small fuel-efficient aircraft.