Jet A1 scarcity: Oil marketers, airlines divided over import licence

Lagos Stakeholders in the aviation industry are divided over the recent policy that Airline Operators of Nigeria (AON) be granted license to import Aviation fuel in order to find a lasting solution to the scarcity of Jet A1, which is threatening the industry.

This is in spite of the fact that operators are still in the process of putting together their papers with a view to obtaining a license from NNPC for the carriers to start importing aviation fuel.

An oil marketer said the decision to peg Jet A1 to N500 per litre amounts to the government trying to reintroduce subsidy for a product, which had long been deregulated, stressing that the decision may not last long, as far as the Russia-Ukraine war persists.

He added that the galloping Jet A1 price was one nobody has control over, adding that the high cost of crude oil in the global market has affected a lot of crude dependent products like diesel, petrol, aviation fuel and kerosene, including cooking gas, which he said had remained stable for some time.

He equally noted that contrary to insinuations, aviation fuel was not scarce, stressing that it was expensive while many of the oil marketers have enough for international airlines that are not complaining, unlike their Nigerian counterparts. Airlines are said to owe oil markers millions of Naira for supplies and are only willing to sell to them on a cash and carry basis and rationed supplies due to huge debts.

Consequently, the Major Oil Marketers Association of Nigeria (MOMAN) has urged airline operators in Nigeria to clear outstanding debts and adopt a pricing formula for the procurement of aviation fuel. Executive Secretary, MOMAN, Clement Isong, said: “For the local airlines, there are two challenges.

First of all, they don’t like signing binding contracts based on a pricing formula. They prefer running from one marketer to another, trying to get products at cheaper rates. “Secondly, many of them owe.

“They owe millions of naira to the industry, not just marketers alone. When they finish from one marketer, they run to another one. “The marketers are demanding that the airlines pay up their debts because the burden on the industry is becoming too much,” he said.

He said adopting a pricing formula meant the marketer must commit to a volume of products which would be supplied to the airline within a specific period. He continued: “The pricing formula means that you buy over a period of one month a certain quantity of products, and the airline must pick that product.

“So when they have agreed, you go and buy that volume, and you keep it for them, but if they don’t agree, you can’t keep that volume for them. This is what the Group Managing Director of Nigerian National Petroleum Company Ltd., Mele Kyari, has asked them to do.

“There are international best practices that they need to adhere to in running their businesses. This includes a pricing based formula committing to volumes and also clearing their outstanding debts to ensure smooth operations in the sector. “If they adopt this method, marketers can take the risk of buying products and keeping them in our tank farms, but they need to commit to volume because that is how the business is done,” he said. (New Telegraph)