Transport

Aviation fuel price rises 143% in three years

Aviation fuel has in the last three years risen by about 143 per cent, information gathered from the industry has shown. Airline operators said the product which sold at N255 per litre earlier this week had been scarce in the past two weeks.

The PUNCH learnt that around early 2016, the product was sold at N105 per litre, but by the middle of the same year, it rose to 145 before it got to N200 per litre in August the same year. It was gathered that the price of the commodity fluctuated between N200 and N220 until about two weeks ago when an artificial scarcity raised the price to N235. Airline operators said the price peaked at N255 per litre earlier this week, accounting for about 143 per cent rise since it was last sold at N105.

An airline source told our correspondent that the price of the commodity increased suddenly about two weeks ago but there had been no reason for the scarcity which led to the rise in price. The source explained that the development might not have led to any significant increase in the price of flight tickets but that it had increased delays across airlines’ flight networks, especially for those who needed to refuel outside Lagos.

Describing the scarcity as artificial, an industry source said loading had been the major problem as marketers had to transfer the product using truck as there were no pipes linking the airports to depots. The Chief Executive Officer, Aero Contractors, Capt. Ado Sanusi, said marketers increased the price without regard for local airlines due to lack of long-term contracts with them.

The Executive Secretary, Major Oil Marketers Association of Nigeria, Mr Clement Isong, told The PUNCH that there had been no problem with supply.

Trends in aviation fuel cost: According to industry analysts, the problem of arbitrary price increase has been persistent and needs to be looked into as aviation fuel, otherwise known as Jet A1, accounts for 30 per cent to 40 per cent of airlines’ operating costs. African Airlines Association recently said fuel costs in Africa was the highest, adding that high taxes and charges were the reasons the continent’s airlines were less competitive than their counterparts in other regions of the world.

Aviation security expert, Group Capt. John Ojikutu (retd), said cost of fuel had for long been a major complaint of high cost to airline operations. He stated that to reduce the high costs, there was a need to find an alternative to bringing the supply of fuel from Atlas Cove through Ejigbo to the airport.

He explained that it would reduce the cost of bringing the product by trucks and eliminate demurrage on the trucks at the airport. He said, “All these contribute about 30 per cent to the costs of aviation fuel which can be reduced to about 10 per cent if the pipelines from Mosimi/Ejigbo to airports are repaired.

“There is also the danger of contamination through the use of trucks most of which are used for supplying other petroleum products.” Aviation analyst, Mr Olumide Ohunayo, said it had become necessary for the government to consider facilitating local production of the product to reduce the costs. Meanwhile, the Nigerian National Petroleum Corporation on Thursday said it had enough stock of aviation fuel to meet the needs of airline operators and other consumers of the product.

The NNPC’s spokesperson, Ndu Ughamadu, stated that the assurance became necessary to douse fears in certain quarters that there was shortage of aviation fuel across the country. The corporation stated that contrary to insinuations of shortage, there was a stock of over 80 million litres of aviation fuel in its storage, enough to last for over 37 days at the current daily consumption.

This, it said, was even if more cargoes of the product were not imported within the period. The NNPC, therefore, enjoined airline operators and other consumers of the product to discountenance the rumours and go about their business without fear or distraction. Ughamadu urged marketers and other players in the sub-sector to desist from any action that could impede supply and distribution of the product. He noted that the corporation would do everything within its powers to sustain the seamless supply of petroleum products nationwide. He called on Nigerians to remain vigilant and report anyone found engaging in product hoarding or diversion to the industry regulator, the Department of Petroleum Resources, or to any law enforcement agency around them.

Pix: Shell aviation fuel tank