Aviation fuel: Airfares set to rise as marketers forecast N700/litre

“Importers are business people; jet fuel does not fall under subsidy so they have to pass their cost to consumers. I only know that they are responding to market conditions, they changed their prices and everything has gone up, diesel is almost closely marking Jet fuel, diesel has gone up and now jet fuel”

According to him, importers have to recover the cost of importation as the product does not fall under subsidy.

“The prices has to go up because it is not subsidised by the government, so whoever that is importing has to recover the cost and make a tiny bit of profit. The subsidy doesn’t cover jet fuel. Nigerians don’t consume jet fuel, they pay for it through the airfares. Before the hike, airfares constitute about 40 to 50 per cent of airlines’ cost of operations which they pass on to the consumers. Now that the price of aviation fuel is almost doubled, it means that jet fuel now constitutes up to 60 to 70 per cent of the operating cost of the airlines. You still have other cost increases across the board. Handling charges have gone up at the airports, and a number of other things have gone up. Naturally, what happens is that airlines will adjust their prices to the operating cost in other to make a profit and they are still complaining that they are not making profits”

Also speaking, the Chief Executive Officer, Centurion Aviation Security and Safety Consult, John Ojukutu, said that aviation fuel should not be sold at less than N500/litre.

“As of the time we were selling aviation fuel for N200/litre, it was going about $3-$4 per gallon in the United States; if you translate, that it is about N2,000. So, I have been saying that aviation fuel shouldn’t be sold less than N400 to N500 per litre, we are just facing the reality. Have you forgotten that we are importing? We don’t refine it here! If we are refining it here, it would have been a different thing, we are importing it.”

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