OrderPaperToday- The Nigeria Civil Aviation Authority (NCAA) has threatened a shut down of the aviation sector if nothing is done to urgently address the scarcity and high cost of aviation fuel(Jet-A1).
NCAA boss, Captain Musa Nuhu, made the disclosure during a stakeholder meeting with the House of Representatives Adhoc Committee on Aviation and Petroleum Resources (Upstream and Downstream), over the rising cost of aviation fuel and airfares in the country.
Nuhu also informed that the aviation sector has been overstretched and NCAA has commenced grinding some airlines.
Other stakeholders in attendance at the meeting chaired by Deputy Speaker, Idris Ahmed Wase include Mele Kyari, Group Managing Director of the Nigerian National Petroleum Company (NNPC), alongside the Airline Operators of Nigeria (AON) and Jet-A1 Marketers.
According to Nuhu “The airlines as we speak are overstretched. We have started grinding airlines. We must do the right thing because we are getting to the edge.
Any further delay we might enter the vicious circle awaiting to break.
He continued: “Over the last couple of weeks, we have seen a significant rise in the cost of aviation fuel to about 670 per litre. What this has done is that it has increased the cost of airline operations from about 30% to 50%.
For me, as a regulatory authority, this is of significant concern in terms of the inconveniences on the travelling public in terms of flight cancellations, delays and there are issue of significant safety concerns.”
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Speaking on safety concerns, the NCAA Boss said: “God forbid, I don’t want to come before this committee to explain why A or B happened. I thank the leadership of the House, Rt Honourable Speaker for this interaction to proffer solution to this astronomical increase.
“Every day, the price keeps increasing. I won’t be surprised if by tomorrow it goes up to N700 per litre. Every day, there is an increase in 50 naira. Yesterday, it was 635, today, it’s 670.
Considering the cost of air tickets now, the airline industry cannot survive. It’s either we shut it down because we cannot generate enough revenues to operate safely.
I’m not only talking about cancellations, I’m talking about safety of flight operations. It is the responsibility of the NCAA to ensure safety of the airspace and I am responsible for it. The Honourable House should help find solutions. Aviation is very critical to the economy.”
In his defence, Ogbugo Ukoha, an Executive Director at the Nigerian Midstream and Downstream Petroleum Regulatory Authority, insisted there was sufficient aviation fuel.
According him, “We have about 28 marketers. I can also confirm to you that from our records, we have sufficient supplies.
As at today, we have 34.9 days’ supply on ground. That means even if nothing comes in, what we have ordinarily would be enough to serve us for the next 34 days plus.
All we can say is that there is enough fuel on ground. that is all we can say from the regulator’s perspective.”
On his part, Vice Chairman of the Airlines Operators of Nigeria, Allen Onyeama sought a decrease in the prices of Jet-A1.
“In my opinion, aviation fuel should be brought down to N200. We are appealing to our brother, the GMD of NNPC to help.”
Speaking earlier, the Deputy Speaker as well as the House Leader, Alhassan Ado-Doguwa called out the NNPC over its failure to make petroleum products available despite drawing up the process that led to the passage of the Petroleum Industry Act (PIA).
The lawmakers pointed out that Nigerians were still suffering due to scarcity and high cost of the products.
According to Doguwa: “This law is not working. There is fire on the mountain. You drew the process from beginning to finish and there should not be any reason why petroleum products should be scarce.”
Deputy Minority Leader, Peter Akpatason, raised the alarm that some persons were hoarding the product so as to make gains from it.
“GMD, we urge you to direct those hoarding this product to release it. We know there is a cartel responsible for this.”
In his response, the NNPC GMD said it would be impossible to bring down the cost of aviation fuel since the prices are fixed at the international market.
“It’s impossible to bring the price of petroleum to N200 per litre, because today the landing cost of ATK is N480, the price is something we have no control over. That’s what the international price says.
The only way you can do this subsidize this, all the same we will do everything possible to bring down these prices.”
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On the issue of the Petroleum Industry Act (PIA) the GMD said, “The passage of the PIA is not a mistake, it’s history made and this country will never regret the passage of the PIA.
It’s also our duty to ensure that we continue to implement the provision of this law to the benefit of our country and countrymen. Whenever there’s supply gap it is our role to ensure that supply gap is closed by NNPC, we will work with the authority and other stakeholders to ensure that if there’s any gap that’s existing we fill it.
“Why we did not act, all the supply data we have shows sufficient products in the country. This means that it may be in the wrong hands.
The airline operators must also have the right commercial arrangement with their support petroleum products particularly Aviation Turbine Kerosene (ATK).
There’s frenzy in the market today, no one knows what the price will be tomorrow. That is still not an excuse for escalation of prices.
We will work with relevant authorities to ensure that if there is any such thing we will deal with it jointly as an industry. We will work together to ensure that this is resolved,” Kyari assured.