₦airaland Forum

September 13, 2016
By Ulf Laessing and Libby George
LAGOS/ABUJA

(Reuters) -
Foreign airlines flying to Nigeria have started to refuel abroad to bypass pricey, and increasingly scarce, jet fuel as the oil producer battles a hard currency shortage that has made fuel available only at a very high price.

It is the second blow for airlines operating in Africa's recession-hit biggest economy in a year that first saw the central bank make it almost impossible to repatriate profits from ticket sales as it tried to prevent a currency collapse.

The crash in the naira since a devaluation in June has led firms who market jet fuel locally, such as Total, Sahara and ConocoPhillips, to double the price to 220 naira a litre in August, and to as much as 400 naira this month, an airline executive said.

Even at the higher costs, marketers' lack of dollars has made fuel scarce. Some carriers have had aircraft stuck, or were forced to cancel planned journeys, after frantic last-minute calls from ground staff warned there was no fuel available.

"The economy is crying out for investment, and now it is going to be even harder for anyone to visit," said John Ashbourne, economist with Capital Economics. "Who is going to want to park a billion dollars in a country that you can't even easily fly to? It sends the worst possible signal."

A spokesman for state oil company NNPC did not answer calls for comment.

The central bank hoped floating the naira would attract dollar inflows, but the naira sunk by 50 percent, forcing oil firms to charge airlines, stuck with piles of naira, in dollars for jet fuel.

"It's an impossible situation. The oil marketers don't want to sign long-term agreements anymore so we have to accept whatever prices they demand," one airline executive said. "We sell tickets in naira and now they want us to come with dollars.

"Spain's Iberia and United Airlines cancelled their Nigeria services earlier this year, and two local carriers also halted operations. Other international airlines responded by boosting ticket prices within Nigeria, charging its globe-trotting elite as much as $2,000 for an economy class ticket to Europe to cut losses - more than double the cost of a Lagos ticket bought abroad.

WELL-HEELED PASSENGERS
Dubai-based Emirates has started a detour to Accra, Ghana, to refuel its daily Abuja-bound flight, a spokesman said. The airline already cut its twice-daily flights to Lagos and Abuja to just one.

The move was aided by a substantial drop in Ghana's jet prices amid tax reform last month, according to the Ghana Chamber of Bulk Oil Distributors.

Air France-KLM said it had refueled abroad in "very exceptional cases" by juggling suppliers and stomaching extra costs.Germany's Lufthansa is loading more fuel in Frankfurt for its Lagos flight, where the ground staff doubt their ability to refuel for the final destination of Malabo, the capital of Equatorial Guinea, an executive said. The airline did not respond to official requests for comment.

The scarcity has even pitted airlines against local consumers; a surge in demand for cooking and heating kerosene during the rainy season, when households cannot easily burn wood or charcoal, means if the airlines do not pay up, marketers will sell to locals.

Airlines met with transport ministry officials last week in Abuja to press for fuel at lower prices, industry sources said.

Nigeria used to be one of the most profitable markets for foreign airlines, landing planes with plenty of first and business class to cater to executives and officials jetting around under former President Goodluck Jonathan.

President Muhammadu Buhari cut air travel allowances for officials in a bid to tackle graft; others simply have less spending power with consumer inflation running at an 11-year high of 17 percent.British Airways, a popular choice for well-heeled Nigerians, said it is using smaller aircraft on its Lagos-London route, as did Air France-KLM.

Turkish Airlines' use of smaller planes has added another inconvenience: passengers complained there is not always space for luggage on the smaller aircraft, delaying it for days. The airline did not respond to requests for comment.

(Reporting by Ulf Laessing in Lagos and Libby George in Abuja. Additional reporting by Matthew Bigg in Accra, editing by William Hardy.)

AcidosisMega:
[quote author=Algebra11 post=29301393]Insurmountable economic problems plagued the Buhari regime as petroleum prices collapsed in the face of expanding foreign debt. Buhari instituted austerity measures that caused severe hardship to the average Nigerian. In addition, political corruption continued unabated, with politicians escaping to Western countries with millions of dollars in government money. In an effort to stop dissension, Buhari instituted restrictions on the press, political freedoms, and trade unionists. By August 1985 even the military had had enough, and Ibrahim Babangida took control of the government. Buhari was detained in Benin City but was released at the end of 1988.http://www.britannica.com/EBchecked/topic/83801/Muhammad-Buhari

ShowYourCertificate:
Buhari was only known for his anti-corruption campaign. In the aspect of Nigeria's economy, he was an outright failure. He and his economic experts lacked grasp of the economy and how to tackle it. Below are excerpts from the academia on his economic failures.

General Muhammadu Buhari’s regime, which ousted the civilians on the eve of 1984, had little to offer apart from budget tightening and slogans. The ad hoc austerity measures of the military failed to stabilize the economy, especially as it was unwilling to challenge the failed policy commitments of its predecessors. The economy spiraled rapidly downwards through the mid-1980s.

Peter M. Lewis “Getting the Politics right: Governance and economic failure in Nigeria” Rotberg I. Rotberg (ed.) Crafting the New Nigeria: Confronting the Challenges, Lynne Rienner Publishers, 2004, Page 104.

In the wake of the Buhari coup, Nigeria faced a new three year period of instability (having moved from a 7 in 1983 to a -7 in 1984 in the Polity 2 index). In this period, Nigerians suffered the worst oppression in their history of being an independent republic.

There was an immediate drop in the democracy score not only because of the replacement of a democratically elected government by Buhari’s military junta, but also because of government control over free society, something new in post-independence Nigerian politics. The Nigerian Medical Association and the National Association of Nigerian Students were outlawed. Two decrees severely restricted freedom of the press, as journalists were barred from reporting information considered embarrassing to any government official (in Buhari’s infamous Decree Number 4). Security risks to the state, as determined by the chief of staff at Supreme Headquarters (in Decree Number 2), could detain for up to six months without trial. Special military tribunals handled the business of sedition in lieu of civilian courts. Wiretapping, detentions without charges, and other police infractions against basic civil liberties became normal. Fela Ransome-Kuti, a high- life singing superstar, whose lyrics were a continual embarrassment to the government, was arrested in the Buhari period (Metz 1991).

Polity 2’s appraisal gives Nigeria a -7 for the early years of Buhari is thus fully justified. Yet indiscipline in administration (or the inability of any mortal to discipline Nigerian society) gave Nigeria a sense of being ruled within the anocratic zone.

Nigeria’s political culture undermined Buhari’s authoritarian pretensions. His anti-corruption campaign was enforced haphazardly – some faced execution and others (those who were well-connected) walked free. His environmental protection crusade was similarly haphazard. Its principal target were petty traders working out of what the government called “illegal structures” (i.e. market stalls and workshops along the streets). Police destroyed many of these shacks incurring widespread resentment.

The incompetence of the Buhari regime was evident to all, and mostly for self- protection of the military, on August 27, 1985 a group of officers under Major General Ibrahim Babangida overthrew Buhari and took charge along with his Armed Forces Ruling Council (AFRC).

James Fearon and David Laitin “Nigeria (NigeriaRN 1.2)”

Lilimax:
All these certificateless people wey won rule by force
E no dey reign again!
Na NEPA bill put our country for this present wahala

Abeg where is showyourcertificate?

Dear Esteemed Customer,

The National Bureau of Statistics (NBS) is scheduled to release the inflation figure for July 2016 in the coming days, based on the Data Release Calendar available on the Bureau’s website.

The Economic Intelligence Group forecasts inflation rate (year-on-year) to accelerate to 17.2% in July 2016 from 16.5% posted in June 2016. Our methodology adopts an autoregressive analysis of past prices, while it recognizes all the assumptions used by the National Bureau of Statistics (NBS) in its computation of monthly composite consumer price index (CCPI).

We forecast inflation rate (year-on-year) to ascend to 17.2% from 16.5% reached in June 2016.

The expected upward momentum in headline inflation in July reflects increases in both food and core components of inflation.

The food component which has the largest weighting in the inflation basket will be responsible for a substantial amount of the overall price pressure. The uptick in prices from items such as fish, meat, vegetables and bread on the back of higher transportation and distribution cost will push inflation rate for the month of July higher.

The core index should also inch up slightly due to cost push factors on the back of continued depreciation of the Naira. The local currency depreciated more than 28% against the green back in the interbank and parallel market over the levels in June. The pass-through effect will be seen in the prices of imported items such as motor car and vehicle spare parts. Increases in cost of passenger transport by air will further drive the core index higher.

The nation’s reliance on imports of raw materials, refined products and consumer goods implies that a weaker Naira will compound the effect of imported inflation.

Attached is the detailed Inflation forecast report.


Regards

barcaboi:
and risk their reputation bn dragged into the mud....no organisation does that

DropShot:
The uncommon common sense that could arrive at your conclusion out of so many possibilities.

DropShot:
Stop finding something to marry Buhari to BH. BH's was specific in its demand and attempt to establish Islamic caliphate in NE and other Northern states. How does this have anything to do with election and Buhari. Do you realize BH started in 2009 while Yar'Adua was president well before PMB contested against GEJ?

DropShot:
I am sure you have no single evidence for your claim. Boko Haram started in 2009 and grew from strength to strength while PDP govt couldn't do anything about it. Yet you want sane people to believe PMB was behind it even when Gen Azazi was murdered by the killer party for revealing what we had suspected that PDP is Boko Haram.

Do you even remember the IB confirmed BH had infiltrated his regime?

And if we must use your warped logic, it's right to say GEJ is behind Niger Delta Avengers and MEND and other militancy problems bedevilling us.

gretblue:
Then it will also be logical to conclude Niger Delta Avengers and Militants are GEJ boys who also went on rampage as soon as their Boss lost election.

a2personal2013:
[size=25pt]When will President Buhari show Nigerians his own certificate?

This is why he will never be taken seriously[/size]

cyojunior1:
[size=25pt]I tink if they are been tried for forgery result.

We shouldn't forget our own illilterate president bull_hari also failed to present his certificate
[/size]

barcaboi:
yet it can be found on NSE site.....stop dis ignorance nah....yet Zenith never deny am so far

AntiWailer:
Fake on Nigeria Stock Exchange website ?



Press release is not a letter.

expressglory:
Here is the original letter from Zenith Bank found on the website of NSE Nigeria Stock Exchange.
http://nse.com.ng/Financial_NewsDocs/14267_ZENITH_BANK_PLC_PRESS_RELEASE__CORPORATE_ACTIONS_JULY_2016.pdf

HungerBAD:
Story posted earlier.

Nice try.

MXrep:
life must be really unfair to omenka

omenka:
Been mostly inactive on the forum today, not up to 10 comments in total if I count correctly - lots of things to do. Yet some eternally pained Ugandan Chimpanzees still couldn't get a grip on their miserable lives. Mentions exceeding 4 times the comments made so far and counting...

I don't think I could wish this kind of life on my worst enemies- queuing behind one another to wipe my butt clean after I take a dump. Una pele oo.

omenka:
That was my "easy". You know my own na.

Why did you retire your Sincere9gerian handle after your Ineffectual Buffoon's loss? Shame?

omenka:
Even when iPod miscreants are licking my anus, you sef jump enter queue- shame no dey catch you??

What exactly do you people intend to benefit from constantly sticking your heads so deep "inside"??

If I comment on a thread, its a problem, if I don't, they feel like killing themselves. Why do you people chose to live such miserable lives completely dependent on someone else's deeds??

Na wa oo.