The problem of aviation fuel scarcity also known as JET A-1 has not only made Nigerians witnessed incessant flight delays or cancellations but also contributed to other economic challenges.
It started gradually at the beginning of the year and got tougher in April due to the fluctuation in the nation’s foreign exchange market and the subsidy removal on the pump price of Premium Motor Spirit (PMS) also known as petrol. The matter became worse when the current forex regime of the Central Bank of Nigeria (CBN) became effective, aviation fuel scarcity started like the normal fuel scarcity resulting in regular flight delays and grounding of business meetings, events and other activities in the country.
Even government programmes, business transactions are delayed on regular basis because of the flight cancelation brouhaha. A case in point was the delay in the submission of a report by a committee set up by the Minister of Transportation on Nigerian Maritime Administration and Safety Agency (NIMASA) in July this year. The Minister who was supposed to receive the report sat for almost two hours waiting for the Chairman to arrive but was held up due to flight delays and cancellation.
However, the operators and stakeholders in the aviation sector had challenged the government for lack of actions and long term solutions to the aviation fuel scarcity to make the sector perform its role in the nation’s economic and business climate in this trying times.
In August this year, Economic Confidential discovered that the pump price of aviation fuel had double, from N120 to over N240 per litre. This had greater impact on the current increase in the flight tickets for both local and international flights. The prevalent aviation fuel crisis has continued to disrupt flight schedules nationwide.
Coupled with the high cost of doing business, the Nigerian business climate has become unbearable for aviation operators in the country. On August 31st, Aero Contractors announced the suspension of operation in the country while all its workers are sent on indefinite leave followed by First Nation airline engaged on self-regulatory suspension.
To cushion the challenges, the Federal Ministry of Aviation, the Nigerian Civil Aviation Authority (NCAA), Nigerian National Petroleum Corporation and airline owners/operators had met on different occasions on the matter, yet no lasting solution have been deciphered to bring succor to air passengers and the high cost of the flight fares as witnessed in the vehicle transportation system due to the increase in the pump price of petrol.
However the Federal Government intervened in the aviation fuel debacle by engaging stakeholders in the aviation fuel supply chain to ensure availability of the product. The NCAA said fuel marketers are being engaged to clear difficulties in the supply of the product that had ripple effects on airline operations for close to four months now. The regulator said it was aware of the prevailing scarcity of Jet A1, which has unavoidably resulted to flight cancellations and delays by the airlines.
To address the matter, two former aviation ministers, Princess Stella Oduah and Chief Osita Chidoka had set up Ministerial Committees to resolve the crisis. However these efforts are yet to yield any positive results as the problem has continued unabated thereby increasing more strains on stakeholders in the sector. There have been cases of airlines scaling down their operations in the country in order to manage available Jet A-1 they are supplied with.
Analysts in the sector have said the oil marketers failed to meet daily fuel needs of the airlines in the country which require close to 500, 000 litres of fuel for about 120 daily flights for local and international flights. The inability of the marketers to meet the supply and delivery of the products has led to an estimated revenue loss of N500 million per day for the airlines and also affected passengers movement and businesses.
Reacting to this allegation, the marketers had attributed the cause of the supply crisis of aviation fuel in Nigeria to low stock because of their inability to source for Forex to import adequate Jet A1. The marketers also claimed to face problem of distribution because the same vessels that discharges Jet A1 also distributes other petroleum products, thus hampering proper distribution of aviation fuel to Kano, Abuja and other cities in the north.
For the airline operators, they are not only faced with cancelled or delayed flights but also are counting loses as fuel scarcity results to grounding of flight operations everyday nationwide. The effect of the aviation fuel ‘wahala’ has been increased pressure on Nigerian roads as traffic grew. Whereas 70% of the Nigerian roads are in deplorable conditions, it has the tendency to increase road accidents and more loss of lives and properties if drastic and concrete measures are not put in place taking by the government.
The operators had informed the government to come to their rescue in tackling the aviation fuel palaver through the revitalizing of the Warri Refinery’s Aviation Turbine Fuel (ATF) as well as the pipeline-hydrant system that helped supply aviation fuel to the Murtala Muhammed Airport (MMA), Lagos. They also pointed out that the Atlas Cove and Mosimi pipelines-hydrant system also assisted the supply chain of Jet A1.
There have been allegations and complaints about sabotage from the quarters of oil marketers in the country. Passengers have asked for the reason behind the continuous delays in flight schedule that has affected their movements and business to a large extent. The NCAA as the regulator, stakeholders in the aviation sector, and government have been called upon to find ways of curbing the lingering aviation fuel scarcity.
However, Chairman of the Airline Operators of Nigeria (AON), domestic carriers’ body, Captain Nogie Meggison had urged the Federal Government to intervene in the critical shortage of aviation fuel. He said the matter had resulted to about 50% cancellations and delays of flights nationwide and put the operators in dire need of meeting the obligations of their customers. He also accused marketers of continuous increase of price of Jet A-1 to agonizing levels as the price had moved to above N200 per litre, thereby resulting to increased operational cost of operators.
Also, some industry experts have continued to blame the marketers for the aviation fuel shortage. Group Captain John Ojikutu accused the fuel marketers of causing artificial scarcity in order to raise the product’s price. He also queried the activities of the airlines operators for not facing reality claiming increase in cost and lack of access to foreign exchange by marketers as the major cause of the shortage. He called on government to address the crisis which he traced to ‘cabal’, adding that government should direct NCAA to be involved in the importation, distribution and supplying aviation fuel to the airlines in the country.
Aviation experts said many of the pipelines in the country are either vandalised or not maintained appropriately by the Nigeria National Petroleum Corporation (NNPC), stressing that there was need for revamping the rusty pipelines abandoned for many years. They argued that If the NNPC can repair those pipelines, there are possibilities that the nation’s refineries will be able to supply aviation fuel to the operators at cheaper rates.
Major marketers of petroleum said the scarcity of foreign exchange has prevented marketers from shipping jet fuel to airports. The NNPC have been accused of leaving aviation fuel and kerosene importation in the hands of independent marketers and concentrated on Premium Motor Spirit (PMS). The marketers therefore capitalized on the opportunity to inflate the prices of these products, contributing to the hardship faced by the nation in this time of recession .
The question is how long will it take the government to tackle people behind the fuel subsidy and artificial scarcities in the name of foreign exchange? The government need to take quick action by providing clear cut policy on deregulation of the aviation fuel or allow NNPC steps in to make the products available to the aviation sector and reduce the sufferings faced by passengers across the nation’s airports. The marketers, regulators and the NNPC should come together in tackling this ugly problem of incessant scarcity of aviation fuel in the interest of the ailing economy.