Oil marketers Monday announced that they have stopped importation of of aviation fuel into the country on account of lack of access to foreign exchange.
The umbrella body of the marketers,Major Oil Marketers Association of Nigeria,MOMAN,confirmed the hitch through its chairman,Olumide Adeosun,who also hinted that there is no requisite guarantee on investment inspite of the deregulation of aviation fuel,popularly known as Jet A1.
Adeosun,in an update on current market situation made available to PremiumNews,maintained that a return to cost recovery and free market and competitive economics is inevitable for the sustainability of the production and distribution framework in the nation’s petroleum downstream industry.
He 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 and even as the product remains scarce
across the sub-region.
According to him,on account of the intervention of Nigerian National Petroleum Company Limited, NNPC over the last several weeks, aviation fuel is landed into marine terminal tanks in Nigeria at between N480 and N500 per litre depending on the logistics efficiency of the operator.
He added:“Due to high costs of specific handling of Jet A1 (special transport and continuous filtration), the product is sold on the tarmac at Ikeja (our benchmark), between N540 and N550 per litre and across other
airports at between N570 and N580 per litre.
“During this period of NNPC intervention, as
NNPC uses the nominal CBN exchange rate, no independent importer would import
aviation fuel as it is unable to access foreign exchange at the same rate, leaving NNPC
as the major importer of aviation fuel for now, even though the product is deregulated.
” In comparative terms, the aviation industry is already benefitting from government’s
intervention when local prices are compared to West African regional prices, despite the
deregulated status of aviation fuel.”
He observed that the situation is unsustainable given the already huge N4 trillion cost of the Premium Motors Spirit subsidy.
He explained that the interventions are sometimes necessary to mitigate shocks and help the economy, operating environment and the public adjust to the new realities while efforts are being made and innovations introduced to optimize costs and increase efficiencies.
He added :“These interventions cannot however be permanent in nature. It is our hope that the war in Ukraine comes to a speedy conclusion and the integration of products from the local refineries into the supply chain (Dangote, NNPC and modular refineries) will mitigate the high costs being borne by the government and Nigerians.” .
He emphasized urgent need to prepare the operating environment and indeed the larger economy for this eventual return.
He reiterated MOMAN’s commitment to the institutionalization and sustainability of a viable petroleum downstream sector in Nigeria,adding that the association will continue to lend its support towards easing the burden of Nigerians at this difficult time.
He empathised with all users of petroleum products; airline operators, private vehicle owners, logistics and transport companies, manufacturers, cooking gas users (in homes) and indeed all members of the public who are affected by the worldwide petroleum products price increases which impact logistics, transportation, distribution, and operation costs.
He said that the petroleum products downstream industry which is engaged in logistics and distribution is also suffering the impact of these higher costs brought about by the post-covid world economy and the war between Russia and Ukraine.
