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JetA1 Price Hike Cripples Airlines’ Operations

Airline operators are considering increasing air fare to accommodate recent JetA1 price hike and scarcity across  the country.

Aviation fuel commonly called Jet A1, and an industry source said the pump price of the product had gone up from N200 to about N220 – N255 per litter in recent weeks, thus raising airlines’ operational costs.

According to an industry source, the operators’s inability to access the fuel, especially outside Lagos, has made it difficult for some Nigerian airlines to keep to scheduled operations. The source, who wouldn’t want to be named, also alleged that some oil marketers are hoarding the product and selling only to international airlines who are willing to pay prices much higher than Nigerian carriers.

“In the last three weeks, the industry has been plagued by the scarcity of Jet A1, a development that has led to a significant increase in the cost of the fuel in the domestic market, and some airlines are considering increasing their ticket fares officially”, said a source at the Lagos airport.

We learnt that at the root of the increase is the poor state of roads at the Apapa port in Lagos where the product is stocked upon discharge from ships.

It was also learnt that marketers who import Jet A1 through the Apapa port are incurring  extra costs due to the poor road network and infrastructure at the port, which they are transferring to the airlines in form of higher prices.

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“In Lagos, the airlines are still able to get the product at N220 per litter, but in Abuja and the  other northern states, it is higher; sometimes you get it at N255 per litter because the marketers are now charging more money for trucking (or bridging) the product from the Lagos port to Abuja and the rest of the airports in the northern part of the country,” added the source.

Daily Sun learnt that due to the challenges faced by airlines accessing the product, several flight delays and cancellations across airports have been recorded in the last three weeks.

Even for Nigerian airlines involved on international flight operations, it was learnt, had to suspend flights due to JetA1 shortages.

Nigeria imports the bulk of its fuel as its local refining capacity has been hampered by the obsolete state of its refineries. For petrol and kerosene, the government pays subsidies to enable citizens buy at reduced prices. For aviation fuel, however, marketers who import, mostly from European, South American, and refineries in Africa, sell at prices that are not regulated by the government.

Source: The Sun

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