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Reps resolve airlines’ dispute, as parties agree on N480/L for Jet-A1

Domestic airlines

The House of Representatives yesterday mandated the Nigerian National Petroleum Company (NNPC) Ltd., and the Central Bank of Nigeria (CBN), to nip the planned strike by the airline Operators in the bud.

It enjoined the two government agencies to provide the required assistance and declared that airline operators should name fuel marketer of their choice to supply them aviation fuel over the next three months.

The House enjoined marketers to begin the process of application for licences to import aviation fuel without intervention by middlemen, and ruled that the six million litres of aviation fuel should be sold at N480 per litre to the operators.

Speaker of the House, Femi Gbajabiamila, had earlier decried that certain resolutions of the House in the past were not implemented leading to the impasse being witnessed in the aviation sector.

He added that although the strike had been called off, the nation did not need to wait for threats of strikes to nip them in the bud, and that since the last meeting between the airline operators and the House, there has been no effective communication on the resolution of the issue.

Commenting, Chairman, Air Peace, Allen Onyeama, who represented the Airline Operators of Nigeria (AON), noted that the sale of aviation fuel at N500 per litre was still expensive, saying that aviation fuel should not take more than 40% of operators’ total operating cost.

AON Chairman, Abdulmunaf Sarina, who is also the Chairman, Azman Airline, noted that 75% of aviation fuel was imported by the NNPC through Duke Oil.

He argued that as a palliative, the NNPC should supply the 25,000 tonnes of aviation fuel promised to the operators, which was approved by President Muhammadu Buhari.

He observed that an earlier resolution on aviation fuel price reached with the operators was not implemented.

I compelled some fuel marketers to take the loss and to sell aviation fuel at N480 per litre after getting a call from the Chief of Staff to the President that the operators were planning a strike and I promised to intervene.

Price volatility

The Group Managing Director, NNPC, Mele Kyari, however, countered that the agreed price of aviation fuel was not implemented because of price volatility.

Kyari added that going by market forces, the price of aviation fuel could be as high as N700 per litre, adding that the way out was for the government to subsidise the price, noting that access to foreign exchange (FX) was another constraint faced by airline operators.

On his part, the CBN Governor, Godwin Emefiele, said oil theft in the Niger Delta was exacerbating the scarcity of foreign exchange, adding that the bank has no provision for FX to aviation operators.

He noted that since the landing cost of aviation fuel was N460 per litre, the price would come to N550 per litre at the pump, stressing that the CBN would not grant any concession because it would amount to giving subsidy to aviation operators.

He said there was a need to look at the pricing structure that the operators were talking about, adding that the situation was getting attention from the Presidency.

“I compelled some fuel marketers to take the loss and to sell aviation fuel at N480 per litre after getting a call from the Chief of Staff to the President that the operators were planning a strike and I promised to intervene,” Emefiele said. (NAN)

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