Aviation fuel scarcity hits aviation industry

 Aviation fuel scarcity has again hit the nation’s aviation industry as airlines are currently experiencing shortage of the commodity.

Nigeria’s flag carrier airline, Arik Air has also confirmed the development by alerting air travellers of severe aviation fuel (JET A1) scarcity.

The airline said the scarcity became evident few days ago when oil marketers started rationing JET A1 supply to airlines stating limited stock at the depots.

The situation is critical in Lagos and Abuja, the operational hubs of Arik Air and the airline has warned that if the situation is not addressed as a priority by the marketers, more flights could be delayed or cancelled.

Arik Air, the largest consumer of aviation fuel in Nigeria operates more than 120 daily flights and its daily fuel requirement is about 500,000 liters. This means that Arik Air will be most affected by the scarcity and delay in marketers to source and deliver fuel to the airlines.

Spokesman for Arik, Banji Ola said the airline has therefore appealed for the understanding of passengers as it grapples with the JET A1 scarcity.

“Where flights are likely to be delayed, the airline will notify passengers through SMS. In case of flight being cancelled due to limited supply of fuel by marketers, passengers will be accommodated on first available alternative flight at no cost.”

Aside the scarcity, the price of the commodity has also skyrocketed.  In Lagos, aviation fuel, otherwise known as JET A1, goes for N150 per litre, while it costs N160 and N170 in Abuja and Kano respectively.

Consequently, passengers across the country’s airports were left stranded as airlines rescheduled their flights over scarcity of the commodity. Most of the airlines had their flights either rescheduled or cancelled, prompting many others to take to road.

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 Africa is the highest in the West African sub- region.

While the specialised fuel is sold for about $2.30 cents per litre in Nigeria, $2.30 in Benin and $1.94 cents per litre in Cameroon, it is sold for close to $3.14 cents per litre in Ghana.

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.

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 cost of operations comes down, airlines are likely to bring down their fares.