Jet fuel prices: No “concessionary rate” on FX, NNPC, cenbank tell airlines

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The head of Nigerian state oil firm NNPC and the central bank governor told the national assembly and the country’s airline association on Monday that they were unable help with soaring jet fuel prices.

However, in a resolution to the meeting, NNPC agreed to supply jet fuel to marketers nominated by the Airline Operators of Nigeria, and the association will itself apply and be granted a jet fuel import licence, the speaker of the house of representatives, Femi Gbajabiamila, said.

Fuel prices have risen sharply around the world since Western companies began imposing a series of increasingly tight financial sanctions on Russia after its invasion of Ukraine in late February.

The price increase has affected already debt-laden airlines that rely on imported kerosene, or jet fuel, that is not subsidised, unlike gasoline.

“We cannot fix the prices of aviation fuel on a deregulated commodity. The only way we can fix the price of aviation fuel is to introduce a subsidy,” NNPC chief Mele Kyari told lawmakers.

Nevertheless, the head of AON said NNPC had failed on its earlier promise to supply jet fuel at a fixed 500 naira ($1.21) a litre.

“NNPC told us the president has approved 25,000 metric tonnes for us (airlines) but we never got this fuel,” Allen Onyeama, vice president of AON and chairman of Air Peace, said, referring to Nigerian President Muhammadu Buhari. “We nominated some marketers who have been licensed … to handle the 25,000 tonnes, but we are yet to get this fuel.”

The AON almost suspended flights but U-turned on the decision just hours before the move was due to take effect on Sunday. read more

Central bank governor Godwin Emefiele said he could not offer the airlines a “concessionary rate” on foreign exchange to help with more imports. “If it is naira intervention that airlines want, they could approach their banks. The banks would look at it,” Emefiele told lawmakers.