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  • Updated: March 16, 2022

Aviation Fuel Hike: Marketers, Airlines Initiate Dialogue

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Sydney Elike
Sydney Elike

A Graduate of Theatre Arts, Writer, Movie Buff, Filmmaker, Avid Reader, Video Game Enthusiast and a...

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The Major Oil Marketers Association of Nigeria (MOMAN) has revealed that it is having talks with airlines in the country for the steady supply of aviation fuel amid the ongoing hike and scarcity.

The development was made known by Clement Isong, the Executive Secretary of (MOMAN) in an interview with the News Agency of Nigeria (NAN) on Wednesday.

He said that the dialogue comes on the heels of the intervention of the House of Representatives and supervision by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Isong empathised with the stakeholders involved, including citizens struggling with the adverse effects of the increment in the price of crude oil in the international market.

Speaking further, he blamed the hike in crude oil price and its derivatives like aviation fuel, petrol, diesel, and kerosene on the ongoing conflict between Russia and Ukraine.

We understand their pains even the Federal Government that is paying a higher cost to subsidise petrol.

"The rise and fall of oil prices is cyclical. We have been here before and we are hoping that within a short period the international supply of crude will adjust to meet demand and prices will come down to more acceptable levels", Isong stated.

He mentioned that the situation could abate if marketers could get foreign exchange at decent rates instead of sourcing from the parallel market.

Isong advised foreign airline operators to change the way they conduct their business to enable them to get a steady supply of aviation fuel.

"There is aviation fuel in the country. However, the product is expensive. Many of us who have contracts with international airlines have to keep stocks for them.

"Now, international airlines pay for their products based on a pricing formula, so it is predictable. There is no quarrel on the price. It is Platts plus Premium.

"The Premium is fixed. The Platts, which is a price benchmark service for the oil industry, goes up and down depending on the international market price.

"I should also add that we buy the product in forex and the foreign airlines pay in forex. So there is no forex risk.

"For the local airlines, there are two challenges. First of all, they don’t like signing binding contracts based on the pricing formula. They prefer running from one marketer to another trying to get products at cheaper rates.

"Secondly, many of them are owing. They are owing millions of naira to the industry, not just marketers alone. When they finish from one marketer, they run to another one", he added.

 

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Sydney Elike
Sydney Elike

A Graduate of Theatre Arts, Writer, Movie Buff, Filmmaker, Avid Reader, Video Game Enthusiast and a...

More From this Author

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