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Author Topic: Aviation fuel scarcity cripples airlines’ operations in Nigeria  (Read 594 times)

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For stakeholders in the aviation sector, these are not the best of times. To domestic airline operators, passengers and regulators, the scarcity of aviation fuel, known in aviation parlance as Jet A-One, has become a nightmare.

The problem has been lingered for the past few months with operators groaning under the burden of huge financial losses. The scarcity of Jet A-One is causing disruption in flight schedules. It is also leaving bitter tales for passengers to tell. They argonise over occasional delays and in some cases, flight cancellations.

Aggrieved passengers, who often demand to know the status of their flights and the inability for airlines to provide satisfactory response, has become a challenge to the industry regulator – the Nigerian Civil Aviation Authority (NCAA).

The scarcity has pit many passengers against airlines’ personnel at the various airports nationwide, even as fuel marketers and the affected airlines trade words and accuse each other alleges sabotage. The situation has put the NCAA under tremendous pressure, as it battles to defuse the tension generated by passengers’ complaints.

Investigations show that beyond the crisis of fuel shortage, the instability in the price of the product has also created problem in the supply chain. Several efforts made in the past to resolve the problem defied solutions.

The two immediate past Aviation Ministers – Mrs. Stella Oduah and Chief Osita Chidoka, set up ministerial committees to resolve the crisis. But their efforts failed to yield results. The problem outlived their tenure and the scarcity has continued to put stakeholders in the industry under pressure.

Many local airlines, including those operating international routes have been forced to scale down their operations. The airlines, who absolved themselves of blame for the readjustment in their route operations, said that marketers might be grappling with infrastructure challenge.

However, some players, who spoke with newsmen blamed the scarcity on fuel marketers.

An aviation security expert, Group Captain John Ojikutu, accused the marketers of creating artificial scarcity to pave the way for product price hike.

To Ojikutu, the airlines and marketers have questions to answer. He said: “Yes, the airlines are shouting. Are the marketers shouting? Are they concerned? What exactly is the problem? Is it a problem of scarcity or one of cost?

“If it is a problem of cost, is it that of the marketers or that of airlines? Cost in what form? Is it that it is high or because the marketers are not getting foreign exchange?”

Ojikutu urged the government should look into the problem. “It is a cabal. This is why the NCAA should be involved in providing aviation fuel”, he said.

According to him, the NCAA must be involved in the importation, distribution and marketing of the product. “It should find out why the airlines are not getting fuel. That is why I said there is a problem somewhere, because only the airlines are shouting; the marketers are not”, the expert said.

Also, the domestic carriers, under the auspices of the Airline Operators of Nigeria (AON), urged the Federal Government to wade into the problem.

AON’s Chairman Captain Nogie Meggison, urged the government to address the acute shortage of aviation fuel.

Meggison said the call became imperative because of the perennial product scarcity, which according to him, has led to 50 per cent of the delays in flights and cancellations.

He said: “We have been forced to cry out over this perennial problem because it continues to put us in difficult situation to go the extra mile to fulfil our obligations to our customers in spite of the inconveniences that go with it. “However, we are at the mercy of oil marketers and many times our hands are tied such that we are left with no other option than to cancel flights.”

The AON chief alleged that apart from the Jet A-1shortage, marketers have raised the price.

“Until April this year, I bought Jet A-1 for N105 a litre. About a month ago, the price jumped to N145. Two weeks later, it rose to about N200 a litre. Today, the price has skyrocketed above N200 a litre. This has greatly increased our operational cost”, Meggison said.

According to Ojukutu, “fuel cost accounts for about 40 per cent of operational costs of most airlines. So, the astronomical rise in its price by over 100 per cent has equally increased operational costs.

“In the light of this, operators’ feasibility studies and financial projections were threatened, thereby putting the airlines in financial difficulty.

The AON chair described as unfortunate that despite the development, airline operators have not increased ticket prices so as not to discourage customers, who have been overstretched by the harsh economy.

He said the economic downturn has reduced the disposable income of many customers.

Meggison said: “For most of them (customers), the alternative means of travel is by road; our major competitor. It should be put on record however, that road transport uses Premium Motor Spirit (PMS) also known as petrol, which is highly supported or assisted by the Federal Government with the exchange rate made available to marketers at N285.

“On the other hand, airlines don’t have such foreign exchange support or availability from government with regards to helping to make Jet Fuel available to airlines or at an affordable price”, he said.

The AON chair however informed that had met earlier in the year with the Minister of State for Aviation, Hadi Sirika, to seek a solution to the problem. The minister, he noted, assured the delegation of his assistance.

As operators await the government’s intervention on the matter, they have called for the revitalisation of the Aviation Turbine Fuel (ATF) at Warri Refinery and the pipeline -hydrant system supplying aviation fuel to the Murtala Muhammed International Airport (MMIA), Lagos.

The operators said that beyond reactivating the Warri Refinery, the Atlas Cove and Mosimi pipelines -hydrant system, hitherto supplying aviation fuel to the airport should also be fixed.

It was learnt that before the pipelines were shut in 1996, aviation fuel hydrant at the MMIA was supplying fuel to aircraft through the pipeline from Atlas Cove and Mosimi.

Meggison urged the Nigeria National Petroleum Corporation (NNPC) to upgrade the pipelines, which must have become rusty, having been abandoned for 18 years. “We need NNPC to revive this pipeline so that airlines can get cheaper and cleaner aviation fuel,” he said.

He pointed out that one of the causes of high cost of aviation fuel is the cumbersome distribution chains it passes through before getting to airline operators.

Pumping fuel through the pipeline and hydrant, the AON chief said, is safer and more cost-effective compared to using tankers and fuel bowsers, adding that airports no longer use tankers to distribute fuel.

Fed Govt steps in

The aviation stakeholders may soon heave a sigh of relief with the intervention of the Federal Government. The Nation learnt that the stakeholders in the aviation fuel supply chain are being engaged not only to ensure availability of the product but to end the perennial scarcity.

The NCAA said the government and fuel marketers are in talks to clear the hurdles in the supply of the product for stress-free operations of the airlines.

The regulator which acknowledged the prevailing scarcity of Jet A-1 and its effect on airline operations, said it has also taken note of the efforts being made by the airlines to ensure hitch-free air transportation.

Last month, Arik Air said it was grappling with flight schedule disruptions caused by severe scarcity of aviation fuel across the country.

Its spokesman, Adebanji Ola, said since the beginning of this year, Nigeria has been grappling with inadequate supply of aviation fuel leading to shortages of the product and consequently the disruption of flight operations.

Ola said: “The airline operates an average of 120 daily flights, requiring about 500,000 litres of fuel daily. Due to the large number of domestic and international flights, it is the most affected by the inability of oil marketers to meet its daily fuel requirements on a timely and consistent basis. This has forced the airline to postpone flights while waiting for the fuel marketers to source and deliver the product.

“On many occasions, despite all efforts in engaging the marketers, fuel could not be sourced and flights may eventually be cancelled, causing not only revenue loss for the airline but also inconveniencing passengers.”

He, however, identified marketers’ supply and infrastructural challenges as some of the key factors responsible for the epileptic supply of aviation fuel.

Ola said: “At the root of the fuel supply crisis is low stock due to the inability of marketers to source for foreign exchange to import more Jet A-1 fuel into the country.

“There is also a distribution challenge, as the discharging of vessels bringing Jet A-1 and other petroleum products are done in the same jetty. Loading various trucks for distribution to cities like Kano or Abuja takes considerable effort and time.

“The situation in the North is even more difficult since the product takes a longer time to be delivered due to the trucking distance. Oil marketers have also resorted to trucking of aviation fuel to the airports because hydrants are not consistently available at the airports.”

According to the Arik Air’s spokesman, in the course of the ongoing dialogue between the government and oil marketers, the operators appealed to customers to bear with them on the flight delays and cancelations being experienced due to the prevailing scarcity of aviation fuel.

Until the outcome of the ongoing talks between the government and the stakeholders, airlines have the problem to contend with.



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