Chinedu Eze
9 January 2009
Lagos — In what may signal an imminent reduction in the fares charged by Nigerian airlines, marketers of aviation fuel, known as Jet A1, have said that they would crash the prices by end of January to be in tandem with the deeping prices of crude in the international market.
This was disclosed yesterday by the Deputy Chief Executive Officer of Oando Plc, Mr. Omomofe Boyo, who explained to aviation correspondents at the Murtala Muhammed Intern-ational Airport, Lagos, that the present high price of aviation is caused by the large stock of high price materials over time.
He said the prices of Jet A1 would come down by end of the month when the stock must have been sold out and the marketers replenish their stock at the current international prices.
"That is a peculiarity here which I believe would be sorted out by the end of this month. What has happened is that we have large stock of high price of materials which we had in the system. So when the international prices were falling the local prices were not meeting that fall because we already had high price materials," Boyo said.
He pleaded with the airline operators to exercise patience over the high price of aviation fuel in the country and explained that the fall in the price of crude oil has caused a fall in the prices of other petroleum products.
Boyo said the abnormalities experienced would soon be normalised because of stability that is being experienced in the market.
"With the fall of crude and with the fall of prices petroleum products, it seems also that a lot of people have lost money on diesel and kerosene, so the correction in market is actually stabilisng now and we are trying to see normalcy by end of January," he said.
The Chief Executive Officer of Bellview Airlines,Kayode Odukoya, in an exclusive interview with THISDAY, had recently accused the marketers of forming a cartel and using profits from jet fuel to subsidise losses in the sale of other fuel products.
He said: "You find a situation where jet fuel in July 2008 was $147 per barrel, but in December we are below $50 and the jet fuel prices in Nigeria have not come down by any significant margin. We fly into Cameroon. The price in Douala is cheaper than in Nigeria. Jet fuel price in Ghana is cheaper than in Nigeria. Jet fuel price in Liberia is cheaper than in Nigeria.
"This is because Nigerian marketers have formed a cartel and they are using profits from jet fuel to subsidise losses in other areas, which is unacceptable. Our industry cannot act as subsidies for NGOs. It cannot. We need to benefit from the lower prices of jet fuel in international market. Jet fuel at Heathrow Airport, London, is selling below two dollars for US gallon. In Nigeria, we are still paying close to four dollars per US gallon. It is almost a dollar per litre. It is the most expensive jet fuel in the market."
On restoration of the pipeline for moving fuel to the airport, Boyo said it was a forgone issue as pipeline vandals have caused the industry to insist on the use of trucks which they could control and which content they were sure of.
"Pipeline has not been in use for a very long time. It has been vandalised years ago and there had been various attempts to repair it because of the integrity of the technicality required for aviation fuel. So when it is attractive to people to vandalise the pipeline to scoop fuel for their use, the industry has decided to continue to lift aviation fuel by trucks. It is more under their control than pipeline the breach of which you may not be able to know until after contamination has occurred," Boyo said.
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