The production of aviation fuel, known as Jet A1 locally would help to regularise supply and eliminate scarcity according to the Managing Director of the Nigerian Airspace Management Agency (NAMA) Capt. Fola Akinkuotu.
Akinkuotu also charged the oil and gas sector in Nigeria to consider critically the production of the commodity in the country in line with the Nigerian Content Development initiative of the Buhari administration.
This is in tandem with the position of Nigerian airlines.
They maintain that with about two million litres demand daily, Nigerian airlines may be saving over N30 billion annually if aviation fuel, known as Jet A1 is refined locally.
Airlines have always kicked, saying the product is sold at exorbitant rate to them because it is imported and there are too many costs that go with the importation, including demurrage, transportation and storage, which are added to every litre of fuel sold to the airline.
Besides, the uncertainty created by the scarcity of the product keeps some passengers away.
Aside the high exchange rate also reflects in the final prices of the product, which explains why fuel at cheaper rate because of the low price of crude, whereas Nigerians are still buying the product at outrageous prices.
In addition, the scarcity of the product usually spreads panic among airlines and air travellers due to uncertainty, which in turn sends the prices higher and sustains the cartel, which allegedly fix the prices; as the airlines believe they would have been generating more money if tickets are cheaper because more passengers will be attracted to the airports.
Akinkuotu who was a guest speaker at the annual Health, Safety, Security and Environment (HSSE) forum organized by PSRGRichardson Oil and Gas which held at Eko Hotel and Suites, Lagos said the call became imperative given the high cost of aviation fuel which gulps over 30 per cent of operational cost of airlines in Nigeria.
He said apart from cost, the supply of the product is sometimes epileptic, resulting in flight disruptions, stressing that the production of Jet A1 in Nigeria would regularize supply, bring about reduced cost which would also translate into lower air fares by airlines.
The NAMA boss who delivered a paper on the topic “Aviation Safety in Nigeria – Challenges, Issues and Solutions” lamented the high cost of aircraft maintenance which he described as “atrocious, largely because these costs are domesticated in dollars.” He revealed however that effort was being made by the federal government to set up an MRO (Maintenance, Repairs and Operations) facility “as part of strategic plans to reduce capital flight, lower the times aircraft leave the country for repairs and lower the cost of maintenance.”