Aviation fuel price highest in Nigeria, other oil producing nations

  • JET A1 price skyrockets

Aviation fuel costs more in Nigeria and other oil producing countries than their counterparts that do not produce oil, woleshadare.net investigations have revealed.

For instance, in Nigeria, despite the stability in the lifting of aviation fuel across the country and the deregulation of the commodity, JET A1 has hit an all-time high of N170 per litre.

The skyrocketing price of JETA1 in Nigeria has added more to the pains of airlines, which use 30 per cent of their revenues for fuelling aircraft.

Jet A1

Managing Director of First- Nation Airlines, Mr. Kayode Odukoya, confirmed that in Lagos, aviation fuel, otherwise known as JET A1, sells for N150 per litre, while it costs N160 and N170 in Abuja and Kano respectively.

Aviation fuel is central to the operations of an airline, as it constitutes between 35-40 per cent of an airline’s cost. The price of the commodity – laden with taxes – in the West African sub-region, is the highest in Africa.

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While the specialised fuel is sold for about $2.30 cents per gallon in Nigeria, $2.30 in Benin and $1.94 cents per gallon in Cameroon, it is sold for close to $3.14 cents in Ghana, which also produces oil. In Luanda, Angola (also an oil producing country), it costs $3.75 per gallon; Libreville $2.05 per gallon; Khartoum, Sudan $2.44 per gallon.

It is only Equatorial Guinea that sells JET A1 for $0.46. Jet fuel prices in some African capitals are double the global average and it is posing a threat to its aviation sector development.

The high cost of jet fuel in Africa compared to other regions due to distribution inefficiencies and infrastructure constraints, has held back the development of airlines and fare reduction.

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Apart from the issues of highly priced jet fuel, Africa’s jet fuel shortfall is expected to triple from 1.8 million mt in 2013 to around 5.2 million mt by 2025. As a result of the high fuel price, ticket prices are relatively high. If the fuel price comes down and costs of operations reduce, airlines are likely to bring down their fares.

Today, fuel prices globally average per 1.3 dollar. In Africa, it ranges between $2 and $3.77. In some places, more than twice what it is globally. Vice-President for Africa, International Air Transport Association (IATA), Raphael Kuuchi, said on the average, they notice that fuel price is 21 per cent more expensive in Africa than the world average. “In addition to that, we brought these taxes together.

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Africa is not a rich continent and we ask, why must we be paying the most? If you look at the high fuel taxes in Africa, the victims are actually oil producers.” He lamented that in most of the oil producing countries; aviation fuel is mostly expensive, adding that it is baffling.

In other countries, he noted that the governments try to build new airports and make a choice to raise the tax on existing passengers to raise revenue to pay airport. However, he explained that IATA’s question has always been, “Why should a passenger flying today pay for an airport tomorrow, which he might never use?”

 

Wole Shadare