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Airlines battles scarcity of aviation fuel

By Roseline Okere and Wole Oyebade
31 July 2016   |   4:32 am
For several days, airline operators in the country have had to battle with challenges arising from the scarcity of aviation fuel, thus leading to flight delays and cancellations


• Lose N500m Daily
As the nation’s aviation industry continues to face the challenges of fuel scarcity; stakeholders have expressed worry on how government’s inaction is affecting the fortunes of the sector. Roseline Okere and Wole Oyebade report on the challenges of aviation fuel in Nigeria.

For several days, airline operators in the country have had to battle with challenges arising from the scarcity of aviation fuel, thus leading to flight delays and cancellations.Although, one single marketer was able to supply nine million litres two weeks ago and another 20 million litres was expected to arrive last weekend, petroleum marketers feared that this might just be a temporary measure to get the airlines back in operation.

Already, the pump price of aviation fuel as at last Friday, increased from N120 to N240 per litre, representing almost a 100 percent.The Guardian gathered that the decision to import 20 million litres was reached after series of meetings between the Federal Ministry of Aviation, the Nigerian Civil Aviation Authority (NCAA), Nigerian National Petroleum Corporation (NNPC) and airline owners.

Aside the inconveniences faced by air passengers on account of delayed or canceled flights in the last two weeks, airline operators are counting their loses as the fuel scarcity continue to bite harder, grounding at least two in every three flight operations nationwide.

The airlines that have been struggling to remain in business due to economic crunch are now in dire straits, losing an estimated N500 million on daily basis.The figure, as confirmed by financial officers of two of the airlines, explained that the loss were due to several refunds that had to be made to passengers, cost of preparing for aborted operations and debts owed to banks.

Major petroleum marketers, who spoke with The Guardian, said that scarcity of foreign exchange has prevented marketers from shipping jet fuel to airports, forcing several of the country’s airlines to cancel and delay many more flights than they normally do.

The marketers also accused the NNPC for neglecting JET-A1 and concentrating only on importation of Premium Motor Spirit (PMS)Already, domestic airliners announced that they were struggling with flight schedule disruptions due to the severe scarcity of aviation fuel.

Air Peace (APK, Lagos) and Arik Air (W3, Lagos) said in separate statements that a recent spate of cancelations would only get worse given the protracted scarcity of Jet A1.As at last week, Air Peace wrote boldly on its website saying, “due to the current scarcity of JET-A1 fuel, we are experiencing delays in our flight schedule. Please, bear with us as we continuously, strive to give you exceptional service”.

Also, Aero Contractors stated on its website: “Due to scarcity of aviation fuel, you might experience schedule delays and flight cancellations. We regret any inconveniences this might cause you as Aero Contractors will always act in your best interest”.

Nigeria imports its Jet A1. But, given the collapse in the value of the Nigerian naira in recent months and given the scarcity of foreign currency, importers have struggled to source enough products to meet local demand.  Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawole, said marketers are finding it difficult to source for forex at the stipulated current rate of N285 to a dollar.

He added that the commercial banks are offering the marketers above N300 per dollar, which he said, has discouraged importers from bringing in the commodity.Olawore hoped that with this latest intervention from the Federal Government, the product would be available next week in the country.He disclosed that a major marketer has imported nine million litres of aviation fuel with additional 20 million being expected next week.

Also speaking with The Guardian on the issue, Manager, Public & Government Affairs/Mobil Oil Nigeria Plc, Akin Fatunke, attributed the scarcity to paucity of forex.
He said: “Government has not made the importation of aviation fuel its focus and it has left it solely to the marketers who are now having challenges with sourcing forex to meet the demand for the product”.He said that Mobil Oil Nigeria, like every other marketer is also having challenges with forex”.

Speaking on the way out, he called on the Federal Government to tackle the issue of pipeline vandalism, which has affected the country’s revenue generation.He also stressed the need to allow the restructuring to work itself out effectively, adding that, this would help the country’s down stream sector.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had in a statement, said that Nigeria’s refineries in Warri, Port Harcourt and Kaduna will soon begin production of aviation fuel as part of efforts to make the product available.Kachikwu stated that the Federal Government was determined to make the product readily available in country irrespective of the fact that it is deregulated.

But, Fatunke feared that the current spate of pipeline vandalism in the Niger Delta might prolong the country’s dream of becoming self-sufficient in the production of aviation fuel.The situation, rather than abating, has continued to get worse. Last Friday, almost all flights services were canceled at the General Aviation Terminal (GAT), Lagos, while rationed flight operations were held at the Murtala Muhammed Airport II (MMA2), Lagos, with spiraled effect to major airports nationwide.

One of the airlines worst hit by the scarcity, Air Peace, has appealed to government to urgently intervene in the crisis.Chief Operating Officer of the airline, Oluwatoyin Olajide, regretted that despite the airline’s efforts to source the commodity, some of its flight schedules were still affected by the scarcity.

Olajide, therefore, solicited the understanding and patience of passengers, saying the airline was concerned about the situation and has been working round the clock to ensure its flights were not adversely affected by the crisis.

Spokesman for Arik Air, Banji Ola, informed that that the airline gulps 500,000 litres of aviation fuel to power no fewer than 120 flights daily. The airline is the biggest consumer of fuel in the sector, and therefore explains the reason Arik is badly affected.

Ola said,  “Marketers have assured that the situation would improve this week as they are expecting delivery of additional stock. Where flights are likely to be delayed or cancelled, Arik Air will notify passengers through SMS and do all possible to accommodate passengers on the first available alternate flight.”

Speaking for government, Kachickwu said the sector has being privatised and the production of Jet A1 was entirely in the hands of the private sector, adding that the Federal Government has been trying to work with them to douse the rousing tension.

He disclosed that in the short term he has been trying to liaise with countries where there is immediate availability of the product, and in the long term, they are working on repairing the Jet A1 pump producing unit in the refineries.