Aviation Fuel Scarcity Bites Harder As Oil Marketer Gives Reasons

Airlines in the country have continued delaying and cancelling flights due to the disruption caused by unavailability or high cost of Jet A1 also known as aviation fuel and this current situation may not abate anytime soon as most airlines seem unsure when normalcy will return.

As an oil marketer says the recent price of crude globally has stirred the local market and airlines that are efficiently run and clear their credit on time will get the product faster than airlines that owe after purchasing the product on credit.

Some airlines have been apologising stressing that the price of the product now sells between N590- N625. Air Peace in a statement titled scarcity of jet fuel said it and other airlines have been facing scarcity of jet fuel supply.

The airline said it has tried to minimise the effect of the situation on its passengers’ travel plans but the scarcity is making a serious impact on its operations.

Arik Air which lamented it equally shared the same sentiments stressing that the commodity is unavailable and where it is available sells between N590- N625 per litre.

It said it had to delay all its March 8, 2022 flights across networks while others were cancelled.

They both explained that passengers might experience flight disruptions in the coming days until the situation improves.

Chief Executive Officer and Executive Secretary, Major Oil Marketers, Mr Clement Isong while explaining the situation attributed what was happening to local airlines to the rise of crude in the international market, access to foreign exchange in Nigeria as well as better payment terms for the marketer.

Speaking particularly on domestic airlines’ inability to get the product and why it is higher he said, “Different airlines have a different payment history. Some airlines make payments on time but some have a history of owing, the airlines who pay up on time on their credit are likely to receive favourable terms from their suppliers against airlines who owe.

“Some airlines will do better than others because they are efficiently run and airlines not managed well will struggle. Marketers importing this product are not hoarding aviation fuel, they want to sell but remember the sale is not complete until the money is collected.

“And there is even something else the supply chain suffers if you buy product a $10 and sell at $11 you make a profit of $1 and when you want to buy it now cost $12/$13 you need to find that money to buy at $13 and so some charge their customers in advance while others go and borrow from banks, if you go and borrow from the banks it becomes high.

Mr Isong also addressed the problems of the high cost of crude in the market and difficulty in accessing foreign exchange, stressing that suppliers are more liable to deal with people willing to pay in advance.

He said, “The problem is two-pronged: forex is expensive in Nigeria and the oil price in the international market is high and even if you had the money to pay, if you are a supplier and have someone to pay in advance and give you cash to pay and you have another that requires credit, you’d give to the person who has the cash to pay in advance.