New Telegraph

Marketers explain reasons for rising aviation fuel price

Major oil marketers, under the aegis of the Oil Marketers Association of Nigeria (MOMAN), have said the rise in the price of aviation fuel is beyond their control, saying it has to do with global market reaction to the Russia-Ukraine war, forex scarcity, inflation and logistics, among others.

 In a statement, the Chairman, Olumide Adeosun, lamented the situation.

However, he said international traders are exploiting the situation by selling only to the highest bidders.

The association said verifiable prices of aviation fuel in West Africa range from $1.25 per litre in Ghana to as high as $1.51 per litre in Liberia, adding that: “The product remains scarce across the sub-region”.

According to Adeosun, due to the intervention of the Nigerian National Petroleum Corporation (NNPC) aviation fuel is landed in the marine terminal tanks in Nigeria between N480 and N500 per litre depending on the logistics efficiency of the operator.

He further stated that due to the high costs of specific handling of Jet A1 (special transport and continuous filtration), the product is sold on the tarmac at Ikeja for between N540 and N550 per litre and in other airports for between N570 and N530 per litre.

He said as the NNPC uses the nominal Central Bank of Nigeria (CBN) exchange rate, no independent importer would import aviation fuel as they are unable to access foreign exchange at the same rate, leaving the NNPC as the major importer of aviation fuel even though the product is deregulated.

MOMAN said: “In comparative terms, the aviation industry is already benefiting from government’s intervention when local prices are compared to West African regional prices, despite the deregulated status of aviation fuel. The situation is hardly sustainable given the already humongous N4 trillion cost of PMS (petrol) subsidy.”

The interventions, according to Adeosun, are sometimes necessary to help the economy, operating environment and the public to adjust to the realities.

Read Previous

On the need to regulate Okada operators

Read Next

Democracy under threat in Africa – Gbajabiamila

Leave a Reply

Your email address will not be published. Required fields are marked *