Price hike: Reps, NNPC, airlines reach truce on aviation fuel

cba house of reps on face masks e
cba house of reps on face masks e

From Ndubuisi Orji, Abuja

The House of Representatives, the Nigerian National Petroleum Corporation (NNPC), oil marketers and Airline Operators of Nigeria (AON) have resolved that aviation fuel should sell for N500 per litre in the next three days.

The AON and major oil marketers are expected to come up with a permanent reduction of the price of aviation fuel,  after three days.

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The Group Managing Director, NNPC, Mele Kyari, disclosed this, after a meeting between the House, airline operators,  major oil marketers, as well as the corporation to address the rising cost of aviation fuel. Kyari noted that it is obvious that once aviation fuel increases, it will affect  prices of flight tickets, which  will adversely affect Nigerians.

According to him, “That is why we are working with you to ensure that those pains are minimized to the barest minimum and one of the elements is the pricing of aviation fuel.

“So, what we have engaged with MOMAN, DAPMAN and the airline operators is that in three days’ time, their representatives will sit down and agree on a transparent base for pricing. That means that they ought to have a referenced benchmark that is quoted transparently in the market. 

“They will have a referenced exchange rate for the Naira so that anyone can compete. They will also agree on a premium which currently differs from Customer to Customer, depending on the volume you buy and the credit level.

“These are the things they can negotiate in three days and close so that going forward, there is a transparent decision on pricing. This will no doubt throw up the actual value of the product in the market. You will no longer see these discrepancies we have seen where some people are selling at 445 and some are selling at N630. This will completely bring close such that you will not see these differences.

“We also agreed that in the interim, between now and the three days that have to close negotiations, (the lowest price we have seen as at this morning was N445 and a high of N605. There is a trader that is selling at N630 and we don’t think this is normal and so, we discounted it), we agreed that the will sell at N500 in the next three days and after that, they will switch to the new price that everyone can assess.”

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However, Vice President of the airline operators, and chairman of Air Peace, Allen Onyema, said with aviation fuel at N500 per litre, air tickets would go for N85,000 per seat.

Onyema said: “Even though at N500, our unit cost per seat will now be about N85,000 barely insurance and other things. That is our pains. I wish we could buy this fuel at N200 so that Nigerians can afford to buy it. That is our predicament and so, the public should understand if there is shift in what they are paying now and what they are going to pay later. 

“Anybody can calculate it just as it has been done here, to buy 8,000 liters of fuels at N500 per liter. How much will that give you for just one hour flight.”

Earlier, the Air Peace boss had demanded for air lines to be given license to import aviation fuel, so as address the issue of unjustified hike in the price of the product.

According to him, “We want to inform the house that we are demanding that we should be given license to import this fuel. If we can buy jets that cost hundreds of billions of dollars, we can afford to import this fuel. Let NNPC give us the right to import this fuel, we won’t complain, sir.”

He added “I have the mandate of every airline in this country to announce to you that if they can’t come down from their rooftops, we have only three more days to be able to fly.

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