Executive Secretary of Major oil Marketers, Mr Clement Isong has said that it is not true that marketers are selling aviation fuel to foreign airlines at N400 per litre. He said that since foreign airlines pay for aviation fuel in dollars, they tend to get preferential treatment. According to him Marketers need the scarce dollars to import aviation fuel. Accessing forex through the banks is not easy. And since the foreign airlines pay for Jet A1 in dollars, most marketers quickly sell to them to get dollars to import more,” Isong said.
The Executive Secretary also said that the only source of supply of aviation fuel to the country currently is through importation. “Jet A1 is brought in through the ports and trucked by road to the various airports across the country”, he said. On the terms and conditions of supply to the various airlines, He said each airline is treated on its merit and relationship with marketers. According to him different airline has different payment history. Some airlines make payment on time while there are some that have a history of owing, the airline’s which pay up on time on their credit are likely to receive favourable terms from their suppliers against airlines who owe. Some airlines will do better than others because they are efficiently run and those not managed well will struggle.
Marketers importing this product are not hoarding aviation fuel, they want to sell but remember the sale is not complete until the money is collected.” He also attributed the current high cost of aviation fuel to the high cost of crude in the international market and difficulty in accessing foreign exchange. The problem is two pronged; forex is expensive in Nigeria and the oil price in the international market is high . Even if you had the money to pay, if you are a supplier and have someone to pay in advance and give you cash to pay and you have another that requires credit, you’d give to the person who has cash to pay in advance. For example, if you pay in advance, you’re better off than people who take credit, this is how business works everywhere and in international trade that is what happens.
You now have a choice; you can buy on credit which makes the commodity more expensive or you can pay cash advance which brings the price down. So what traders who bring in the product do is, they need the cash to pay for supply in advance or get better payment terms to get lower prices and so that is reflected on the customers”. He added that ”Also remember, payment is not made in Naira, it is dollarised and it is impacted on your ability to access forex at a reasonable exchange rate. Not everyone can access forex cheap, ” the Executive Secretary, Major oil Marketers said.
Major aviation fuel marketers known as Jet A1, have said that each airline gets terms and conditions of supply of the commodity based on the existing business relationship with them. Industry operators said that aviation fuel sells at the same International price of $1.026 per litre in Ghana, Guinea, Cote D’ivoire, Liberia, Libya, Togo etc. The difference in local prices of the product in each of these countries is determined by the exchange rate of each country’s currency to the dollar. With the current exchange rate of the Naira at more than N500 to the dollar in the parallel market, it is not surprising that Jet A1 is selling at more than N500 currently.
