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Why fuel scarcity persists in airports nationwide, by marketers

By Wole Oyebade 
10 August 2016   |   2:24 am
Perennial fuel scarcity in the aviation sector was yesterday blamed on the Federal Government, particularly the delay in fulfilling pledges on foreign exchange (dollars) special intervention to the importers.
Fuel scarcity in the aviation sector

Fuel scarcity in the aviation sector

*Several flights still delayed, as operators seek FG’s intervention.

Perennial fuel scarcity in the aviation sector was yesterday blamed on the Federal Government, particularly the delay in fulfilling pledges on foreign exchange (dollars) special intervention to the importers.

Aviation fuel marketers on Tuesday said about three weeks after government pledged to source forex from the International Oil Companies (IOCs) for aviation fuel purposes, they are yet to get the intervention.

Consequently, the importers are resorting to self-help to bring in a small fraction of the aviation fuel (Jet-A1) to ensure that the sector is not entirely grounded.

In a related development, incessant delays in scheduled flight operations have continued in airports nationwide. The development, which has become the norm in the last four weeks was till yesterday observed on all routes, including the high-traffic Lagos-Abuja end.

Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore, told The Guardian that sourcing dollars from the Bureau De Change, otherwise called parallel market at about N400 to a dollar was unsustainable and discouraging to importers.

Olawole said that since it has become impossible to access forex at the interbank market rate, the parallel market rate would bring in the product at a rate airline operators cannot afford.

It would be recalled that the Federal Government in the wake of the current scarcity had promised to avail forex at interbank market rate through the IOCs.

Olawore, however, said that the pledge was yet to come.

With the IOCs like Shell, Exxon Mobil Corporation, and Chevron Corporation, suffering a loss of over $7.1 billion in the first quarter of 2016, it might have been difficult to offer such support demanded by the aviation fuel importers.

“As i’m speaking, we are yet to receive any kind of support from the government. What they are saying now is that the Nigerian National Petroleum Corporation (NNPC) will give us the support.

“NNPC is not giving us Forex for free, but will provide it at the interbank market rate that is fairly cheaper to assist the import of the product. We are still queuing to receive the support and once we get it, within 48 hours, the aviation fuel situation should improve,” he said.

The Executive Secretary added that his members had, however, been resolute to avail aviation fuel to operators, even if inadequate to go round the airlines.

He said no fewer than 23 million litres had been imported into the country in the last two weeks, from forex independently sourced by two of MOMAN members.

Airline operators have also joined the marketers in appealing to the Federal Government to come to their aid and alleviate their suffering due to the fuel scarcity.

Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison, said it was high time the Federal Government had urgently stepped into the matter, to forestall total collapse of the aviation sector.

Meggison reiterated that the consistent nonavailability of the product in the past weeks for airlines to conduct their operations led to 50 per cent of delays or cancellation of flights.

According to him, “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,” Meggison said.

The chairman said despite the shortage of Jet A-1, the marketers had been increasing the price consistently to an unbearable point.

“Till April this year, I bought Jet A1 Fuel for N105 a litre. About a month ago, the price jumped to N145. Two weeks later it rose to about N200 a liter. Today the price has skyrocketed above N200 a litre. This has greatly increased our operational cost.

“For instance, considering that the cost of fuel accounts for about 40 per cent  of the operational cost of most airlines, the colossal rise in price of the product by over 100 per cent has equally increased the operational cost astronomically. In the light of this, our feasibility studies and financial projections are greatly threatened thereby putting the airlines in a dangerous and difficult financial position,” Meggison said.