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Aviation fuel price records 110 % increase in two years

From April 2016 till date, the price of aviation fuel, known as Jet A1, rose by over 110 per cent causing airline operators to grumble over the high cost of the product which gobbles 40 per cent of their operating cost.

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Daily Trust’s analysis of Jet A1 price hike showed that a litre of the product was sold at N105 in April 2016 but the following month, the price jumped to N145 and before mid-2016, it had skyrocketed to N200 per litre adding to airline’s operating cost.

 The Chairman of Airline Operators of Nigeria (AON), Capt. Nogie Meggison, had cried out over the development, even as he said the operators could not increase their ticket prices. 

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 Speaking at that time, Megisson said: “We have been forced to cry out about the perennial problem at this juncture because it continues to put us in a difficult situation to go an extra mile to fulfill our obligations to our esteemed customers in spite of the inconveniences that go with it. However, we are at the mercy of the oil marketers and many times our hands are tied such that we are left with no other option than to cancel flights.”

From 2016 till date, the operators have also experienced epileptic supply of the product and most times acute shortage resulting in flight disruptions.

Oil marketers have always attributed the shortage to scarcity of foreign exchange and despite the current massive interventions in forex by the Central Bank of Nigeria (CBN), the problem has continued unabated.

Worse still, Daily Trust learnt that the price of the fuel has hit an all-time high of N220 per litre in Lagos and N240 to N260 in Abuja and the North East respectively.

Globally, however, the price has dropped according to our findings. For instance, as at March 2018, the price is $1.85 (N666) per gallon in the United States; in UAE, it is $1.80 per gallon and Saudi Arabia $0.91 a gallon.    

According to the 2017 flight operation summary released by the Nigerian Civil Aviation Authority (NCAA), eight airlines – Arik Air, Aero Contractors, Air Peace, First Nation, Dana, Med-View, Azman Air and Overland – operated 48,319 flights.

 With an average of one hour domestic flight gulping 2,500 litres on the Boeing 737 classics, the airlines would have consumed 120,797,500 litres in 2017 amounting to N25,367,475,000 at N210 per litre which was the price per litre as at December 2017.

The Managing Director of Med-View Airline Plc, Alhaji Muneer Bankole, had penultimate week disclosed that the airline spent N22 billion on fuel alone in the last five years while lamenting the raging scarcity.

“Fuel remains an issue. It is no more available now. Fuel in Lagos now is going to N220 and when you get to Yola or Maiduguri, it is N260 and we are not increasing the ticket price. We cannot continue like this,” he said.

 But experts say the situation can be salvaged if there are dedicated refineries for Jet A1 refining. Even at the moment that the product is imported, the dilapidated fuel hydrant system at the Murtala Muhammed Airport (MMA), Lagos has added to the cost with tankers being used to supply fuel for aircraft at the tarmac.

 An industry player said if the pipelines supplying fuel directly from depots to the airport depots had been fixed, some of these charges would not have found their way into the cost of fuel supply.

Retired Group Capt. John Ojikutu said, “We can reduce the cost by repairing the damaged pipelines from the town depot to the airport depot; from the airport depot to the hydrants on the apron and by restoring the pumping stations along these axis.” 

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