Aviation fuel crisis: How reps plan to end scarcity, block middlemen access to market

13 May, 2022 - 00:05 0 Views
Aviation fuel crisis: How reps plan to end scarcity, block middlemen access to market

eBusiness Weekly

ABUJA. — House of Reps in Abuja believes that it can end hardship faced by airline operators in the coming days after it prevailed on leadership of Airline Operators of Nigeria (AON) to cancel its earlier plan to shut down operations due to high price of Aviation fuel.

In fresh move, the lawmakers say it will go beyond rhetoric to put lasting measures in place to help the players in the aviation industry.

Recall that the airliners had on Friday last week issued a communiqué informing the flying public that it would be shutting down operations due to its members’ inability to cope with the astronomical rise in the price of jet fuel.

The threat was however, suspended following interventions by critical stakeholders.

The airline operators who came to stakeholders meeting on Monday called by the House leadership stated that their woes in the industry was compounded when the Nigeria National Petroleum Company (NNPC) limited refused to make available 25,000 metric ton of aviation fuel approved by President Muhammadu Buhari to be sold to them at landing rates to ameliorate the losses they suffered over the months.

Speaking for the operators, the Vice President of AON, Mr. Allen Onyema, who’s Chairman of Air Peace, told the gathering of how his association was invited by the Nigeria Midstream and Downstream Regulatory Authority (NMDRA) to notify them of the President’s gesture, and the need for them to nominate trusted and established marketers to take delivery of the 25,000 MT and sell to them at the landing rate.

He said having nominated 10 established marketers to take the product, he, in the presence of his members called the NNPC GMD, Mele Kyari informing him of the President’s gesture and that their selected marketers would be in touch regarding the product, but he(Kyari) vehemently said no.

“…we were invited by the Midstream and Downstream Authority and we were told that the president approved 25, 000 metric tonnes for us as a palliative to help us. We were very grateful to the president.

It was not free. We were happy.

“We were told to nominate marketers that would market this product for us. We were told to have meeting with these marketers. We called all the marketers. We held meeting with them.

We decided the logistics, so they would take their logistical costs and everything and at the end of the day that fuel was getting to them, and they told us at N335, so we put everything together and it would be getting to less than N400 for the cost and we said even if they sell to us at N450 it would be okay.

“We were told that a week later that is when the consignment would be arriving Nigeria and when this happened, the next we got to hear from the marketers was that they had already been given the consignment that we were all jostling for. So, we waited thinking that they would sell as agreed, but they never.

“I actually called the managing director of NNPC, in the presence of our members. We wanted to hear from him. He answered that there was no way there would leave us to get direct products that it was dangerous. But, I said no, that the marketers you are going to give are the same marketers that would handle it for us.

“He said he did not want any crash or anybody adulterating it. I said how they could adulterate it because they are the same marketers. We are not taking it on our own. Long and short of the story is that this product was not given to us and we noticed that it continued rising and rising,” he said.

Also the President of the Association, Abdulmanaf Yunusa who’s also the Chairman of Azman Air corroborated the allegation, saying that they begged the GMD to give the allocation approved by the president for them to the nominated marketers.

In his response, the NNPC boss, Kyari said their considered safety issues involved in releasing aviation fuel directly to operators, or even marketers, saying that not everyone can handle ADK which necessitated his refusal.

“Rt Hon Speaker it is more complex than they say. Somebody must handle aviation fuel. We cannot surrender the safety of Nigerians to just anyone.

“It is not every marketing company that can handle ATK including the chairman’s company. We cannot give him. He has marketing company. We cannot give ATK to handle. That is why they have to bring the people that we can deal with.

Asked by the House Speaker, Femi Gbajabiamila if they nominate those that can handle it, he said: “why not, we have no problem with that”. — Nigeria Independent.

Asked to speak to the possibility of granting foreign exchange concession to the Airline Operators to enable them access forex and import aviation fuel by themselves, the Central Bank Governor, Godwin Emfiele told that gathering there was nothing the Apex Bank can do since it depends of forex generated by the NNPC through crude oil sales which has been quite low due to oil thefts in the Niger Delta.

“The availability of FX is very important and the issue of constraint from FX arising from issues bordering on theft in the Niger Delta is a big issue. It is when NNPC is able to export that dollars can come in.

“We do not have FX to sell. It would be difficult for us to grant any concession. It means we would be taking a hit or we would be providing some sort of subsidy for the industry, which the NNPC is trying to run away from because the product in question is a deregulated one,” Emefiele said.

Reading out the resolution after the meeting, the House Speaker said that “we remove the language of suspension to cancel. That the issues of shut down have been canceled based on this meeting.”

“NNPC and the airline operators have both agreed that in the interim of three months that marketers of choice that you are comfortable with and you know their mark up will not drive you out of business would be supplied with jet fuel. We talked about 550 or something like that.

“The third resolution is that at the mid to long term, in fact right now you will begin the process of application for your own license for you to be able to import your own jet fuel to assist you in your business.

“Also due to the benevolence of the CBN governor that 6 million litres are available now at N480.

“You will get allocation for the next three months through the companies you have nominated

“In the process of application for license, midstream should as much as possible grant waivers that would not touch on the security and safety of the process.

“Committee chairmen on aviation and downstream should follow up,” Gbajabiamila read. – Nigeria Independent

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