Government should sit down with the airline operators to resolve the aviation fuel crisis
Although the Airline Operators of Nigeria (AON), the umbrella organisation for domestic carriers, last night rescinded its threat to halt domestic flight operations effective from today, the issues that led to the decision are still lingering. The astronomical and continuously rising cost of JetA1 had for the past few months put domestic airlines operating in Nigeria in a quandary. In their reaction to the aviation price hike in March, the airlines had jerked up base fare to N50,000 for a one-hour flight, slashing passenger traffic by almost 40 per cent. Further increasing air fares offers no practical solution because that could force more Nigerians to shun their services.
Since February, domestic airlines operating in Nigeria have faced difficulty in obtaining aviation fuel, known as Jet A1, at the right price and in the quantity demanded. For an oil producing country, this is another emblem of shame. According to the AON, from N190 per litre in January this year, oil marketers increased the price of the product to N300 per litre and by 9th February 2022, it rose to N405 and since then the price has been increasing such that by last week it had risen to N700 per litre. That was what forced the operators into issuing threat notice of domestic flight suspension before commonsense prevailed last night.
Air transportation plays critical role in the economy of any nation and when aviation is paralysed it affects every other sector of the economy. The airlines have lost huge revenues due to inadequate supply of the product and this has reduced the passenger traffic on domestic routes and threatens the sustainability of Nigerian carriers. For years, airlines operating in or from Nigeria have become notorious for delayed and cancelled flights. This has also led to so much uncertainty for passengers and the operators themselves. But the aviation fuel palaver has provided a ready justification for this lapse. Increasingly, air transportation is being threatened in the country.
By its location and passenger traffic, Lagos should naturally be the aviation hub in West and Central Africa. But Nigeria is losing this to Accra, Ghana because of high price of aviation fuel, poor infrastructure, and exorbitant charges by government agencies. That, we insist, cannot be acceptable. Nigerian airlines need an average of 1.6 million litres of fuel a day, while international carriers and private jet operators require about 800,000 litres a day. But scarcity has always been created around the product, although it was never this bad. Yet, as we stated recently, the high price of aviation fuel has implication on safety because in the bid to recoup cost, airlines may be tempted to toy with the extension of maintenance dates. Everything should be done to avert that.
As things stand, the only way the price of aviation fuel and other petroleum products can be determined by market forces in Nigeria is if the country refines the products locally. The war between Russia and Ukraine has had significant impact in the oil and gas sector. With the increase in the price of crude oil, cost of refined petroleum products is likely to soar beyond the reach of many Nigerians. The consequence is that when airlines can no longer afford the cost of aviation fuel and they ground their operations, it would be catastrophic for the national economy.
While aviation fuel worldwide is said to cost about 40 per cent of an airline’s operating cost, the present hike has shut up Nigeria’s operating cost to about 95 per cent. Now that airlines operators have decided to continue with their operations, the federal government must sit down with them to find a sustainable solution to the problem.
