Following the continuous rise in the price of Aviation fuel, there are strong indications that airlines will raise airfares from its the current high cost.
Jet A1 as the fuel is popularly known, is imported into the country through the Lagos Apapa Port only. It is then distributed to airports across the country through road transport.
Aviation fuel makes up 40 per cent of running operational cost of airline operators and the additional road haulage cost makes the product more expensive in airports outside Lagos.
Baring their minds on this latest development, airline operators said they were considering raising the cost of airfare in order to accommodate price hike and scarcity in some airports in the country, with the current pump price of the product in Lagos selling for between N284 and N290 per litre.
Managing Director, CleanServe Energy, a major aviation fuel marketer in Lagos, Mr Chris Ndulue, stated that the current exchange rate of Naira to Dollar and difficulty faced in sourcing foreign exchange is responsible for the hike in the cost of aviation fuel.
According to airline operators, with the exchange rate currently standing at N500 to a Dollar in the parallel market, getting the dollar at official government rate has been very difficult.
Aviation fuel price has been between N284 and N290 naira in Lagos and between N295 and N298 in Abuja.
In Kano, the price is N302 and above. All aviation fuel comes from Lagos. It is imported; it is not sourced locally.
With the current forex regime in the country, you can understand the high prices. By the time you add the cost of moving the product from Lagos to Abuja and various other airports, the prices will never be the same.
There has not really been any scarcity of Jet A1 in the country in the last eight month. There has only been logistics issues like cost of haulage, scarcity of forex, bad roads, among others.
However, I do not see the price of Jet-A1 coming down soon, except there is a miracle.
I wish it comes down because it is currently too high. But all indices and indicators show it will not soon.