As Jet A1 reaches N1000/liter, FG looks to the Dangote Refinery and other options

There may not be any relief from the aviation fuel crisis, which is affecting both airlines and the sector as a whole, until the Dangote Refinery starts operating.

Hadi Sirika, the minister of aviation, made this statement in response to the aviation fuel’s skyrocketing price, which just set a new record high of N1000/litre.

On Wednesday, local aircraft companies made hints that the cost of jet fuel had continued to rise, with prices in Lagos hovering about N900 and N1000 per liter, respectively.

The operators had already issued a warning to the general public to prepare for the worst case scenario of flight delays and cancellations as ramp fuel shortages persisted.

Prices for one-way economy seats currently range from N75, 000 to N110, 000, according to availability. Ticket prices for round-trip travel range from N130, 000 to N180, 000, depending on the route, the airline, and the time of purchase. The route network has also diminished, leaving fewer places for customers to travel to as two airlines have closed their doors.

At a discussion with airline operators, Sirika claimed that the Federal Government was aware of the difficulties facing the world and their harsh realities in the nation.

Energy problem is genuine and widespread, he declared. There is a problem with aircraft gasoline right now, from America to New Zealand. Nigerians are inconvenienced because we cannot manufacture the good. It is made worse by the fact that Nigeria has a shortage of foreign currency and that there are fewer sources of earning it.

He mentioned that the Federal Government had previously obtained 10,000 metric tonnes of jet fuel for domestic airlines and said that the government was prepared to do more.

The administration is currently working to find a long-term solution to this problem. In addition to speeding up our refinery renovations and waiting for the Dangote Refinery to start operating, we are considering importing the product at the right price.

“As a result, if you asked me how soon, I couldn’t tell you when Dangote would start operating or when the refineries would be fixed. I wouldn’t be able to predict when imports would be adequate. But all of these are being worked on by the administration, according to Sirika.

Sirika continued by saying that initiatives were being made to get the Central Bank of Nigeria (CBN) to provide a special window so that airlines could access foreign exchange at the official rate.

The Airline Operators of Nigeria (AON), the industry’s umbrella organization, had issued a warning over the growing price of aviation fuel as well as the future of some struggling member airlines and planned reliability.

Chairman of the AON Abdulmunaf Sarina bemoaned that in addition to the crippling impact of sporadic shortages of Jet A1, the price has increased from N420 per litre in February 2022 to over N833/litre as of last week in a memo to the Nigerian Civil Aviation Authority (NCAA) requesting an upward review of fuel surcharge.

“This has significantly raised operating costs for airlines by more than 130%. However, airlines are unable to raise prices and also struggle with a lack of foreign exchange to run their businesses.

“Airlines are hoping to resort to the introduction of a fuel surcharge of between 25 and 40% of Neutral Unit of Construction (NUC) as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40% of total operational expenses,” Sarina said. “To forestall a backlash and total shutdown of the system.”

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