FG looks to Dangote Refinery, other solutions as Jet A1 hits N1000/litre

Until the Dangote Refinery comes on stream, there may be no respite from aviation fuel crisis rocking both airlines and the industry at large.

The Minister of Aviation, Hadi Sirika, said this in reaction to the astronomical rise of aviation fuel, just as the essential commodity reached a new record high of N1000/litre.

Local airline operators, on Wednesday, hinted that the price of aviation fuel has continued to rise, hovering around N900/litre in Lagos and N1000/litre in the northern part of the country.

Already, and subject to availability, airfares now range between N75, 000 to N110, 000 for one-way economy seats. Round-trip tickets cost between N130, 000 to N180, 000, depending on route, airline of choice and time of purchase. With two airlines also closing shop, the route network has also shrunk with limited destinations for customers to travel.

Sirika, at a meeting with the airline operators, said the Federal Government was not unaware of the global challenges and its biting realities in the country.

He said: “Energy crisis is real and it is global. Today, there is an aviation fuel problem all over the world; from America to New Zealand. It is aggravating in Nigeria because we don’t produce the product. It is aggravated also because foreign exchange is scarce in Nigeria and the source of earning the foreign exchange has also dwindled.”

He noted that the Federal Government had in the past sourced 10,000 metric tonnes of aviation fuel for domestic airlines, adding that the government was willing to do more.

“As we speak, the government is in the process of finding a permanent solution to this issue. We are looking at importation of the product at the appropriate price, accelerating the refurbishment of our refineries and also wait for the coming on stream of Dangote Refinery to boost supply of the product.

“So, when you ask how soon, I wouldn’t know when Dangote will come on stream, I wouldn’t know how soon the refineries will be fixed. I wouldn’t know when imports would become sufficient. But the government is working towards all these to happen,” Sirika stated.

Sirika added that efforts were on to ensure that the Central Bank of Nigeria (CBN) create a special window for the airlines to have access to forex at official rate.

The umbrella body for the carriers, the Airline Operators of Nigeria (AON), had raised the alarm over the skyrocketing cost of aviation fuel and the fate that awaited scheduled reliability and some distressed member airlines.

In a memo to the Nigerian Civil Aviation Authority (NCAA) requesting an upward review of fuel surcharge, Chairman of the AON, Abdulmunaf Sarina, had lamented that in addition to the crippling effect of intermittent shortages of Jet A1, the price has risen from N420 per litre in February 2022 to over N833/litre as at last week.

“This has greatly increased the operational cost of airlines by well over 130 per cent. Yet airlines are unable to increase fares and as well suffer from unavailability of foreign exchange to conduct their operations.

“In order to forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a fuel surcharge of between 25 – 40 per cent of Neutral Unit of Construction (NUC) as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40 per cent of total operational expenses,” Sarina said.

By The Guardian

https://guardian.ng/business-services/fg-looks-to-dangote-refinery-other-solutions-as-jet-a1-hits-n1000-litre/