March 10, 2022

Scarcity of aviation fuel over soon – Kyari, GMD NNPC

…high airfares may force airlines to shutdown operations-DG, NCAA

…from N190 to N670 per litre, we can’t survive-Airline Operators

By Levinus Nwabughiogu-Abuja

The Group Managing Director, GMD, Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari has given a ray of hope to the lingering scarcity of aviation fuel, saying it will end soon.

The came as the Director General, Nigeria Civil Aviation Authority (NCAA), Musa Shuaibu Nuhu said that airline operations might be forced to shut down due to high airfares.

Speaking at a special investigative meeting of the House of Representatives chaired by the Deputy Speaker, Ahmed Idris Wase on Thursday on the fuel crisis, Kyari said there was no excuse for the escalating prices.

The GMD however said it was not possible to reduce the price to N200 per litre as the mechanism was controlled by market forces.

The meeting was also attended by the House Committees on Petroleum Downstream and Upstream, Jet A1 marketers, and Airline Operators.

Kyari said “Why we didn’t act, all the supply data we have sufficient ATK in the country. This means that it may be in the wrong hands. The airline operators must also have the right commercial arrangement with their support petroleum products, particularly Aviation Turbine Kerosene (ATK). There’s a frenzy in the market today, no one knows what the price will be tomorrow. That’s still not an excuse for escalation of prices, we will work with the relevant authority to ensure that if there’s no such thing. We will deal with it jointly as an industry. We will work together to ensure that this is resolved.

“It’s impossible to bring the price of the petroleum to N200 per litre because today the landing cost of ATK is N480, the price we have no control that’s what the international price says. The only way you can do this subsidize this, all the same, we will do everything possible to bring down these prices.”

Reacting to some concerns of the Parliamentarian on the current crisis in the energy sector despite the passage of the Petroleum Industry Act (PIA), Kyra allayed the fears of Nigerians, saying the country will never regret enacting such law.

“The passage of the PIA is not a mistake, it’s history made and this country will never regret the passage of the PIA, its also our duty to ensure that we continue to implement the provision of this law to the benefit of our country and countrymen. Whenever there’s a supply gap it is our role to ensure that the supply gap is closed by NNPC, we will work with the authority and other stakeholders to ensure that if there’s any gap that’s existing we fill it”, he said.

In his remarks before the committee, the Director-General, Nigeria Civil Aviation Authority (NCAA), Musa Shuaibu Nuhu decried the sharp increase in the prices of aviation fuel.

“Over the last couple of weeks, we have seen a significant rise in the cost of aviation fuel. One year ago it was selling at an N190 per liter and as of this afternoon it has gone for N670 per litre, what this has done is has increased the cost of operations. This is a significant safety concern to us, if airlines cannot have enough financial margin to comply with all the mandatory requirements then we have to look at, God forbid I don’t want to come before this committee to explain why something happened. every day, it increases I won’t be surprised tomorrow if it sells for N700 per liter. Considering the ticket price now, the airline industry cannot survive. It’s either we shut down because they cannot generate enough revenues to operate safely”, he said.

Earlier, the Executive Director, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ogbugo Ukoha had guaranteed sufficiency in the supply of the aviation fuel to last for at least the next 32 days.

Noting the role of the agency in regulating the industry and issuing licenses to importers of the product, Ukoha revealed that the authority had issued licences to 28 companies for the importation of the product.

But the Committee picked holes in this presentation, warning against sabotage in cahoots with a cartel.

Specifically, the Deputy Speaker questioned why there was a scarcity of the product if the authority had enough in circulation.

“This is a political era and elections are coming. We do not want anybody to sabotage the efforts that the government has put into revamping the economy so far because aviation is very important to the economy”, he said.

The deputy speaker also lampooned the Nigerian Consumer Protection Council for failing in their responsibility.

Speaking on behalf of the Airliners, the Chairman of Air Peace, Allen Onyema expressed surprise over Ukoha’s presentation.

He however appealed to the stakeholders to ensure the reduction of the aviation fuel prices.

“We are asking sir, that the NNPC should ensure that in the coming days to bring down aviation fuel to N200 per litre. That’s the only time we will be able to operate safely and ensure some running of the scheduled operations in this country. I don’t know how they will do it but they should, it will be good because even at N200 it’s a lot for the airlines. Not N400 or any other higher price, as we are talking now it will soon hit N700 and possibly N1000.

“What happened in the last two weeks is alarming. From a price of N190 per litre two weeks ago, the price is now N670 as of today and we don’t know what it is going to be mater. The government has done so much for us in this industry with the President granting us waivers. We held a meeting and decided to shut down our operations because of the cost of operation. We are owing so much money and we don’t want AMCON to come after us. But we decided not to because we know the impact it will have on the economy.

“We cannot survive like this for another three days. We had to reduce our operations to 30 percent because the product is not even available. So, I am surprised that the Executive Director said they have supplies to last 34 days. We are making so much sacrifice here. I am evacuating Nigerians from Poland and I had to pay three times the usual amount I am not asking for a refund. So, something needs to be done and done fast”, he said.