Aviation Fuel Price Hike Threatens Nigerian Airlines
The aviation industry in Nigeria is facing a severe crisis due to the skyrocketing prices of aviation fuel. As of Wednesday evening, the price of aviation fuel ranged from N2, 690 per litre in Lagos to N2, 990 in Kano, with indications that it may rise to N3, 000 by today. This price hike has put several airlines on the brink of bankruptcy, with some already operating at a loss.
According to Captain Ado Sanusi, Managing Director and CEO of Aero Contractors, if nothing is done to check the price of aviation fuel, some airlines will inevitably stop flight operations. He noted that airlines have not reflected the increase in the cost of ticket, as it would become unbearable for travellers already grappling with high airfares occasioned by the devaluation of the naira and inflation.
Airlines operating wet leased aircraft have tried to increase fares, but passengers shunned their services, forcing them to lower their fares and possibly operate at a loss. Captain Sanusi argued that global crude price has increased by 30 per cent, but aviation fuel price in Nigeria has increased by 50 per cent. He lamented that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has not stepped in to check the outrageous spike in the price of the product.
The Nigerian government's inaction on the aviation fuel price hike is a stark reminder of its failure to regulate the downstream sector. The 50 per cent increase in aviation fuel price is a clear example of price gouging, which is forcing airlines to the brink of bankruptcy. This will have a ripple effect on the economy, as airlines are forced to increase airfares, making travel even more expensive for Nigerians. The government must intervene to ensure that the price of aviation fuel is fair and transparent, and that airlines are not forced out of business due to arbitrary price hikes.
