The Nigerian National Petroleum Company (NNPC) Limited has been subsidising the price of Aviation Turbine Kerosene (ATK) commonly known as aviation fuel, in the past weeks, against the international price.
The was revealed by Major Oil Marketers Association of Nigeria (MOMAN) which specifically said in comparative terms, the aviation industry was already benefitting from government’s intervention when local prices are compared to West African regional prices, despite the deregulated status of aviation fuel.
The marketers warned that the situation was not sustainable given the already humongous N4 trillion annual subsidy cost being borne by the country.
The association stated this yesterday in a statement signed by its Chairman, Mr. Olumide Adeosun.
“In comparative terms, the aviation industry is already benefitting from government’s intervention when local prices are compared to West African regional prices, despite the deregulated status of aviation fuel. This situation is hardly sustainable given the already humongous N4 trillion cost of the PMS subsidy,” MOMAN stated.
It explained that with respect to aviation fuel, verifiable prices in West Africa ranged from $1.25 per litre in Ghana to as high as $1.51 per litre in Liberia, saying even then, the product has remained scarce across the sub-region.
MOMAN maintained that due to the intervention of NNPC over the last several weeks, aviation fuel was landed into marine terminal tanks in Nigeria at between N480 and N500 per litre, depending on the logistics efficiency of the operator.
It further explained that, “due to high costs of specific handling of Jet A1 (special transport and continuous filtration), the product is sold on the tarmac at Ikeja (our benchmark), between N540 and N550 per litre and across other airports at between N570 and N580 per litre.
“During this period of NNPC intervention, as NNPC uses the nominal Central Bank of Nigeria (CBN) exchange rate, no independent importer would import aviation fuel as it is unable to access foreign exchange at the same rate, leaving NNPC as the major importer of aviation fuel for now, even though the product is deregulated.”
