The federal government has crashed the price of aviation fuel for airlines.
The government directed that the fuel should be made available and sold to the airlines at a price of N480 per litre.
Executive secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr Clement Isong, made this disclosure yesterday in Lagos, while reacting to Monday’s meeting between the Federal House of Representatives and the Airlines Operators of Nigeria (AON) in Abuja.
He said a part of the resolution from the meeting was also that six million litres of aviation fuel should be made available to the marketers and sold to the airlines at N480 per litre which was below the landing cost of the product.
Also present at the meeting were officials of the Nigerian National Petroleum Company (NNPC) Ltd. and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The meeting was called by the lawmakers after the AON agreed to cancel their planned strike over the high cost of aviation fuel which they claimed was hindering their operations.
Isong noted that the NNPC had intervened twice in the aviation fuel market due to the rising cost of the product as a result of the high cost of crude in the international market.
He, however, cautioned that this temporary intervention should not become the status quo distorting the market.
“MOMAN does not have issues with temporary government intervention in order to help the market adjust.
“These interventions are sometimes necessary to mitigate shocks and help the economy, operating environment and the public adjust to the new realities while efforts are being made and innovations introduced to optimise costs and increase efficiency.
“This situation is hardly sustainable, given the already humongous N4 trillion cost of the Premium Motor Spirit subsidy.”
Besides, he said, marketers have stopped importation of aviation fuel because they could not compete with the NNPC which had the advantage of accessing foreign exchange at the official rate to bring in products.
Isong empathised with Nigerians and the government over the challenges being faced as a result of the rising cost of crude and its derivatives at the international market due to the Russia-Ukraine conflict.
He expressed optimism that the conflict would soon be resolved while Nigeria’s domestic refining capacity is set to be given a boost with the Dangote, NNPC and other modular refineries coming on stream.
“A return to cost recovery and free market and competitive economics (including access to foreign exchange at competitive rates) is inevitable for the sustainability of the production and distribution framework in the petroleum downstream industry.
“There is an immediate need to prepare the operating environment and indeed the larger economy for this eventual return.
“MOMAN is committed to the institutionalisation and sustainability of a viable petroleum downstream sector in Nigeria and will continue to lend its support towards easing the burden of Nigerians at this difficult time,” he added.