• Monday, December 04, 2023
businessday logo


Airlines face fresh fuel crisis as NNPC supply dries up

Airlines face fresh fuel crisis as NNPC supply dries up

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.

“Our aircraft type is different and fuel burn is different but when there is an increase in fuel price, it will affect us because it will increase our operating costs,” he said.

Azman Air passengers were on Saturday and Sunday stranded at the Malam Aminu Kano International Airport as a result of aviation fuel scarcity.

BusinessDay’s investigations show that most airlines have left the N50,000 base fare benchmark and have increased to about N55,000 to N60,000.

Findings also show that there was no N50,000 fare on Air Peace’s website as of Monday.

Read also: Airlines announce flight disruptions over aviation fuel scarcity

Fares for flights from Lagos to Abuja, Owerri, Port Harcourt, and Asaba on Air Peace, Dana and United Nigeria Airlines have risen to between N55,000 and N70,000 for an economy one-way ticket.

Fares for flights from Lagos to Abuja, Kano and Kaduna on Air Peace, Azman and Max Air have risen from N50,000 to about N65,000.

The AON, on Monday, alerted the public to impending flight disruptions to scheduled operations.

It said in a statement that the development was being forced on members by the growing scarcity of aviation fuel, popularly known as JETA1.

The airlines said: “The scarcity is impacting negatively on seamless conduct of air transport operations and would lead to flight rescheduling, and or, cancellations.

“However, the association and its members are working very hard and in alliance with the product marketers, government and relevant stakeholders, to ensure availability and proper pricing of aviation fuel in the country.”

While pleading the understanding of the flying public in the face of this reality, the AON promised to do all that is necessary and within its powers to restore normal flight schedules as soon as possible.