Airline Operators of Nigeria (AON) and the Major Oil Marketers Association of Nigeria have reached an agreement to forestall the shutdown of local aviation activities in the country.
The two unions agreed to peg the price of Aviation Turbine Kerosene (ATK) also known as Jet A1 fuel at N500 per litre from the current price of N630.
The new price will be in place for 72 hours after which the marketers and the AON are to agree on new price modalities.
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The Nigerian government is also to allow the airline operators to import ATK by granting them licences.
These resolutions were adopted on Monday during the investigative hearing by the House of Representatives ad hoc committee investigating the scarcity of jet fuel.
The resolutions were read out by the Group Managing Director of NNPC Limited, Mele Kyari, during the hearing while the Deputy Speaker, Idris Wase, said the report of the committee will be considered and adopted by the House on Tuesday.
The committee was mandated by the House on Wednesday to conduct the investigation following a motion by the Chairperson of the House Committee on Aviation, Nnoli Nnaji.
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Mr Nnaji brought the motion some weeks after major airlines increased their fares by over 100 per cent. Some airlines now charge N50,000 flat rate for tickets.
At the commencement of the hearing, the Deputy Speaker, Idris Wase, asked Ugbugbo Ukoha, the executive director for Distribution System for Storage and Retailing Infrastructure in the Nigeria Midstream and Downstream Regulatory Authority, to brief the committee on the steps taken so far to crash the price of ATK.
Mr Ukoha, in his response, said the authority had a meeting with the marketers to sell fuel to operators at discounted rates.
He noted that the marketers and the operators failed to agree on any particular price for ATK.
Mr Ukoha also dismissed the allegation of marketers forming cartel to distort the price of the ATK fuel, stressing;
Yes, we have a role to forestall cartels and all, but that is not what we have noticed in this case. We have sufficient product, what we observed is that it is a commercial challenge between the airlines and the marketers. The marketers have their own position, and they are saying we cannot sell in the price suggested here.
Earlier at the meeting, the airline’s operators said they have only three days left to shutdown their operations over the skyrocketing cost and acute scarcity of aviation fuel.
Allen Onyema, Chief Executive Officer of Airpeace who spoke on behalf of the operators demanded that they should be given license to import aviation fuel, saying if they must continue flying, an average Nigerian will spend N120,000 for an economy air ticket.
He said;
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. We are not threatening this country. We have been subsiding what we have been doing. The rate as at today is N630, N640 and N605. We have an aircraft going to Kano, it has about 7000 liters of fuel in it, multiplied by N630. The unit cost per seat is about N70000 per seat. You have not talked about insurance that is very static. Nigerians pay heavy insurance premiums because this country is stigmatized.
“Even at N500, our unit cost per seat will now be about N85,000 barely insurance and other things. That is our pain. I wish we could buy this fuel at N200 so that Nigerians can afford to buy it,” Onyema added while responding to the Kyari.
In their presentation, the oil markers represented by Olumide Adeosun said the high dollar rate was responsible for the high cost of the fuel, refusing to tell lawmakers the landing cost which caused commotion.
Ahmed Idris-Wase, Deputy Speaker of the House and Chairman of the Committee disapproved of the presentation of Ogbogu Ukoha, NDMPRA representative that the prices had been discounted.
Wase had asked the regulatory body the current price of the product and why it was so exorbitant but was referred to the marketers who however sidestepped the questions and could not give specific answers.
