₦airaland Forum

Some Nigerian airlines are in imminent danger of going under if the hike in the prices of aviation fuel persists, THISDAY checks has revealed.

As at Wednesday evening, aviation fuel price ranged from about N2, 690 per litre in Lagos, N2,750 in Asaba, N2,759 in Port Harcourt, N2, 990 in Kano with indications that it may rise to N3, 000 by today.

The Managing Director and CEO of Aero Contractors, Captain Ado Sanusi, told THISDAY in a telephone interview on Wednesday that if nothing is done to check the price of aviation fuel, known as Jet A1, some airlines would inevitably stop flight operations.

He said that airlines have not reflected the increase in the cost of ticket because it would become unbearable for travellers who are already grappling with the high cost of airfares occasioned by the devaluation of the naira and inflation.

It was learnt that the airlines may not have any choice but inexorably increase fares because they cannot continue to bear the cost of the increase, which they described as arbitrary.

THISDAY gathered that some airlines operating wet leased aircraft increased fares but passengers shunned their services; so, they had to lower their fares to ensure patronage and probably operating at a loss.

Captain Sanusi admitted that increasing fares would be fraught with challenges, “because this is low season; so, airlines should push for government intervention to reduce the cost of aviation fuel instead of passing the high cost to the beleaguered passengers.”

He argued that global crude price has increased by 30 per cent but aviation fuel price in Nigeria increased by 50 per cent.

Before the recent increase, the cost of aviation fuel used to be cheaper than what obtained in the United States, but now Nigerian airlines pay more for fuel than the US.

Sanusi lamented that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has not stepped in to check the outrageous spike in the price of the product, insisting that the aviation industry is not having transparent pricing of Jet A1.

He alleged that the agency given the responsibility of monitoring and regulating these prices is not doing its work.

“We cannot operate outside the aviation ecosystem. The price of aviation fuel in Nigeria has recorded the highest increase since the Iran war started. Government ought to intervene; not that it will fix the price but ensure it operates at a certain range. If there is 30 per cent increase in the cost of crude and you increase your price by 40 per cent, adding taxes, cost of transport, levies, then you put your profit, it will get to the range of about 40 per cent. The price should not differ from what is obtained from the international market. That will mean that the pricing is not fair.

“Now, they are pushing some airlines to go out of business, but some marketers will also go out of business. The regulatory agency should step in. There must be transparent pricing. We now have refinery in the country. What we are dealing with now is the price of crude oil, not the logistics of freighting, demurrage charges and other logistics cost of importation, so we should expect legitimate pricing of the product. Airlines are being forced out of business and everyone is keeping quiet, including the regulatory agency. It is unfortunate,” Sanusi said.

Inside source in Air Peace who confirmed what Sanusi said, disclosed that the airline, which is the biggest operator in the country, has been purchasing aviation fuel from prices ranging from N2500 to N3000 and expressed worry that the price may increase in the coming days.

Airline Operators of Nigeria (AON) sources said the body cannot continue to take the losses anymore and has concluded plans to announce increase in the cost of airfares.

“AON will make the announcement soon, domestic airlines cannot continue to bear these losses; otherwise some airlines may go under,” an insider told THISDAY.

On whether the increase will not further deplete the existing passenger traffic, the source said it would not because the segment of the population that travel by air can absorb such increase.

THISDAY also spoke to an executive of one of the major aviation fuel marketing companies in Nigeria who wished to remain anonymous. He said that the price of aviation fuel may still go up again before it would come down.

He explained that the price of the product is high because marketers estimate that the price may increase when they want to purchase another stock; “so, they sell the product at the price that will guarantee their replacement cost. This will enable them to have the money to buy more when their stock is exhausted.”

The senior official also said that the price Dangote Refinery offers the product is high; “so, some of the marketers decided not to buy from Dangote but to buy from an importer who may have imported the product sometime in the past. But now, the marketers did not have any choice but to patronize Dangote when the current stock is sold out.”

He also said that airlines may not have any choice than to increase prices because they cannot continue to bear the cost of aviation fuel.

“If they spread the cost it will be just an increase of N7000 on each ticket. It will not add much to the fare but it will be enough to safe the airlines. The people who suffer in Nigeria are the people of lower class, such increase will not affect those who travel by air,” he said.

The marketer also projected that the price of Jet A1 will still increase before it will finally come down and estimated that by the end of the next two months, the prices will come back to what it was before the Iran war. The price of aviation fuel was N900 per litre before the increases occasioned by the war.

“The war is not ending soon as originally contemplated. Price of aviation fuel will eventually come down, but it may go up a bit before it will come down; may be, in the next two months. Dangote was selling N2, 500 per litre; then N2, 600, but some say it has gone up to N2, 700. You have to note that people are not bothered about the cost of aviation fuel. If it is premium motor spirit (petrol), you have to consider possible massive protest, the labour unions, but nobody bothers about the increase in the price of aviation fuel,” he said.

As at March 25, 2926, the average cost of one-hour, one-way flight ticket in Nigeria ranges from N195, 000 to over N250, 000.

Image123:
How can they be on the brink, when they were charging ridiculous fare, where were they? On the drink?
You'd think it's only in Nigeria that planes fly or avaition fuel prices changed.

Zionmdde:
As usual blame everyone
Blame aki na paw paw join

But tinubu is not responsible for anything

Houseofglam7:
Hardship is like raindrops 🌧️ ☔️
It’ll touch every roof eventually.

Image123:
Is Tinubu responsible for aviation fuel price? i know you need to blame Tinubu for how your life is, no problem. Even your last term result na Tinubu. Somehow the government must be brought into the conversation, except saint Otti of course.
Aviation fuel (Jet A1) prices in Nigeria are primarily determined by independent marketers, the Nigerian National Petroleum Company Limited (NNPC), and international market forces, rather than a fixed government price. Prices are influenced by high import costs, forex volatility, and logistics challenges.

mejai:
On ya mandate we shall die 😡

Deltafirstson:
Although the pump price of fuel was N197 when President Bola Tinubu took over on May 29, 2023, the product now sells for N617 per litre – less than two months after.

In his inaugural address, Tinubu announced that subsidy was gone, fulfilling a promise that all leading presidential candidates made during the campaign.

Nigerians have been lamenting the hardship occasioned by fuel price hike. Amid the lamentation, a video where Tinubu campaigned to slash the price of fuel went into circulation.

Checks by Daily Trust affirmed the authenticity of the video uploaded on the YouTube page of Channels Television.

At his campaign rally in Abeokuta, Ogun State capital, on January 25, 2023, Tinubu spoke on a number of issues, but those of fuel scarcity and naira redesign made the headlines.

However, Tinubu who spoke in Yoruba language, also assured the crowd that though people were saying petrol price would hit N200, it would be reviewed downward under him.

“The great Nigerian youths, the great Nigerian students, the confident Nigerian youths. This is a revolution. This election is a revolution. They are plotting, but they will fail. They said fuel price will increase and reach N200 per litre. Go and relax, we will bring it down,” he had said in the 7th minute of the video.


https://dailytrust.com/breaking-video-of-tinubu-campaigning-to-crash-fuel-



https://www.youtube.com/watch?v=4JH8CC_JdUA

nairalanda1:
Yes, we know all that, and you are very correct.

The problem is, in 2015, when tinubu and buhari came into power, they told nigerians they would diversify the economy, which might have provided some extra income into the budget...which might have helped to pay for some limited subsides on fuels by now (not pernament, mind you, we arepast that).

The problem is, the government didn't do that...so here we are.

Image123:
Is Tinubu responsible for aviation fuel price? i know you need to blame Tinubu for how your life is, no problem. Even your last term result na Tinubu. Somehow the government must be brought into the conversation, except saint Otti of course.
Aviation fuel (Jet A1) prices in Nigeria are primarily determined by independent marketers, the Nigerian National Petroleum Company Limited (NNPC), and international market forces, rather than a fixed government price. Prices are influenced by high import costs, forex volatility, and logistics challenges.

nairalanda1:
Yes, we know all that, and you are very correct.

The problem is, in 2015, when tinubu and buhari came into power, they told nigerians they would diversify the economy, which might have provided some extra income into the budget...which might have helped to pay for some limited subsides on fuels by now (not pernament, mind you, we arepast that).

The problem is, the government didn't do that...so here we are.

Image123:
Is Tinubu responsible for aviation fuel price?

i know you need to blame Tinubu for how your life is, no problem. Even your last term result na Tinubu. Somehow the government must be brought into the conversation, except saint Otti of course.
Aviation fuel (Jet A1) prices in Nigeria are primarily determined by independent marketers, the Nigerian National Petroleum Company Limited (NNPC), and international market forces, rather than a fixed government price. Prices are influenced by high import costs, forex volatility, and logistics challenges.

anonimi:
Petrol should never cost more than N70 per litre, says APC

January 19, 2015

The All Progressives Congress (APC) has described as mere tokenism the reduction of petrol price from N97 to N87 per litre, saying the petroleum product ordinarily should sell for N70.

On Sunday, the federal government announced the reduction of petrol price, citing the fall of global crude oil price.

But the APC through Lai Mohammed, its spokesman, on Monday accused the government of making a show out of deceit, saying “a 10.3 per cent slash in the price of petrol was a mere tokenism at a time the price of crude oil has crashed by about 60 per cent”.

It argued that the pump price of a litre of petrol should not be more than 70 Naira, alleging that at N87 per litre, the government was forcing Nigerians to subsidise the massive corruption in the oil sector by N17 for every litre of fuel.

https://www.thecable.ng/petrol-never-cost-n70-per-litre-says-apc/

Emu4life:
Make dem pack up.
Make everybody use Road.

TimeManager:
The Federal Government has revealed that the elimination of the petrol subsidy under President Bola Tinubu has resulted in savings of over $84 billion, which are now being channelled into the construction and rehabilitation of 40 key road projects across the country over the past two years.

This was disclosed in a policy brief released by the National Orientation Agency (NOA), titled “Two Years Later: Key Benefits of Subsidy Removal,” and made available to journalists over the weekend in Abuja.

The report, which reviewed the outcomes of the subsidy removal since May 29, 2023, noted that the policy averted a looming economic crisis.

It also enabled the Tinubu administration to clear long-standing financial liabilities, increase capital investments, and support the financial stability of state governments.

https://businessday.ng/news/article/84bn-saved-from-petrol-subsidy-now-financing-40-key-roads-report/?amp

Image123:
Tinubu became president in 2023. You must have listened to Bukola Saraki affirm this yesterday.