Airline operators in the country will for the next three months, get aviation fuel also known as Jet A1 to operate their aircraft at the cost of N480 per litre.
The Nigeria National Petroleum Corporation (NNPC) Limited and Central Bank of Nigeria (CBN), which gave the assurance said they will provide six million litres of the commodity during the period.
This was one of the resolutions at the end of the meeting by the House of Representatives on Monday to avert airline operators’ planned shutdown.
The Airline Operators of Nigeria (AON) had at the weekend, said they would effective Monday, shut down operations over the high cost of aviation fuel, which they lamented was now being sold at an all-time high of N700 per litre.
Speaker of the house, Femi Gbajabiamila who announced the resolutions, said the CBN had agreed to provide the aviation fuel at N480 — in what seems like a forex subsidy — pending when the carriers would be granted license to import the commodity.
“In the long term, you commence the process of applying for your own licence to be able to import your own jet fuel. So that it will be removed, whether it is middlemen or frontmen or whatever. You will know the landing cost to assist you in your business,” he said.
He further stated that the airlines will get allocations in the next three months through their nominated companies (marketers) “so that you would not come back and say jet fuel is now a certain amount and it is the fault of the NNPC. You have nominated those people that are selling to you.”
Gbajabiamila said as a long-term solution, the airline operators must commence the process of securing licenses for the importation of aviation fuel to avoid suspicion over the landing cost of the product and other associated logistic issues.
Vice-president of AON, Allen Onyema, said Jet A1 scarcity can be addressed if airliners are allowed to purchase aviation fuel directly.
“We were told here at that last meeting that fuel would be sold to us at N500 which we protested that it was still on the high side because even when fuel was selling at N200 or N250, the operating cost was about 40 per cent,” he said.
Group managing director of NNPC Ltd, Mele Kyari, however, said aviation fuel cannot have a fixed price because it is a deregulated product.
“So you cannot hold onto any price and indeed what you have seen in the media is N700 reference point. It cannot be a reference point. It depends on the market condition. It can be higher than N700 depending on the market. This market shifts. As we speak, it is closely related to the price of crude oil,” he explained.
On his part, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said the apex bank has no control over the flow of the dollar.
“We do not have FX to sell. It would be difficult for us to grant any concession. It means we would be taking a hit or we would be providing some sort of subsidy for the industry,” he said.
