Okon: Aviation fuel market hampered by inefficiency, thin profit margin

Chairman, Avifuel Limited, Capt Augustine Okon said, for too long, the fuel market has been shrouded in clouds of uncertainty, arising from rising costs, forex pressure, import dependence, and erratic supply.

The aviation fuel market, Okon stated, is a mirror of Nigeria itself; rich in promise, hampered by inefficiency, yet always full of hope.

Speaking at a colloquium with the theme, “The Scenario and the Metaphor,” Okon noted that the scenario is technical, involving economics, logistics, refineries, and pricing, stressing that the metaphor is emotional, about trust, hope and the collective dream of a self-reliant aviation nation.

The former founder of the defunct ADC Airlines stated that fuel now takes up nearly half of carriers’ operating costs as prices swing wildly because they are pegged to the dollar, yet revenues are earned in Naira.

He said, “One airline executive told me recently. He said, Captain, every time the naira coughs, our engines sneeze. Their sentiment is one of frustration mixed with resilience. They crave stability — predictable pricing and reliable supply”.

He defended aviation fuel marketers for being misunderstood because of thin margins on profit, foreign exchange scarcity, costly logistics, and debts from airlines piling up like a rubbish bin.

“They are navigating a storm of their own — trying to keep fuel flowing in a market that often runs on promises and delayed payments. Yet, behind their complaints lies optimism. They believe the arrival of local refining — finally — will change the weather pattern.”

“Our regulators and policymakers, meanwhile, speak with cautious assurance. They point to reforms, to Dangote Refinery, to modular refineries, to a renewed local content drive. They say, help is on the way. And indeed, for once, we can see the light through the clouds.”

He, however, said the industry still expects more in the area of speed, coordination, and enforcement, stressing that not enough to announce policy; “We must fuel it into motion”.

“Then, of course, there’s the voice of the public — the passenger who pays for all our inefficiencies. To them, high ticket prices, delays, and cancellations are the visible symptoms of an invisible ailment — fuel costs.”

“If you stopped ten passengers at Lagos Airport today and asked what they think of aviation fuel, most would shrug and say, “All we know is that flight prices keep going up. They’re right.”

Okon disclosed that 60% of industry voices are anxious — watching fuel prices like a weather radar, adding that 25% are cautiously hopeful — seeing the Dangote Refinery as a ray of light, with 10% remaining sceptical — saying, “We’ve heard this before.”

He described the final 5% as eternal optimists — the ones who believe that Nigeria can and will fuel its own future, saying he counts himself proudly among that five per cent.

He recalled that a few months ago, Nigeria was importing aviation fuel — begging for forex, battling shortages, and watching prices climb, but today, we are witnessing something historic: the Dangote Refinery exporting aviation fuel to the world.

That single development, he said, changes the entire flight plan, which means Nigerians no longer have to fly abroad to refuel with the storm clouds of dependency beginning to clear.

“But the true breakthrough will come when we align policy with patriotism. Let Nigeria sell crude to Dangote in Naira and, in turn, let Dangote sell aviation fuel to Nigerian airlines in Naira-based prices. That single act will drastically reduce the foreign exchange component of our airlines’ operations and strengthen the naira from the inside out.”

To steady the flight, he said jet fuel supply must be anchored to local refining capacity — not to imported benchmarks,  dopt transparent pricing indices tied to local cost realities, create a Joint Aviation Fuel Board — bringing airlines, NNPC, NCAA, and marketers to the same cockpit, modernise airport fuel storage and pipelines through PPP models and prepare for the future through Sustainable Aviation Fuel (SAF), green energy, and efficiency investments.

Wole Shadare