Reps summons stakeholders over high aviation fuel price

Posted by Kelvin Osa- okunbor on 2009/01/24 | Views: |

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Reps summons stakeholders over high aviation fuel price

THE House of Representatives Committee on Aviation has summoned major oil marketers, airline operators and the management of the Petroleum Products Pricing and Regulatory Agency (PPPRA) to determine the remote causes of unprecedented jump of the pump price of jet fuel to N160 per litre.

THE House of Representatives Committee on Aviation has summoned major oil marketers, airline operators and the management of the Petroleum Products Pricing and Regulatory Agency (PPPRA) to determine the remote causes of unprecedented jump of the pump price of jet fuel to N160 per litre.
The incessant rise in aviation fuel price has led to increased flight charges and a drop in flight schedules of many airline operators in the country.

Chairman, House Committee on Aviation, Bethel Amadi expressed grave concern on the consequences of unfair aviation fuel pricing in the industry, which if not properly determined, could lead to the collapse of local airline operators.

Amadi spoke at the joint-meeting of the committee with representatives of the PPPRA, Major Oil Marketers Association of Nigeria (MOMAN) and officials of airlines operators in Nigeria which held yesterday in Abuja.

The committee chairman charged the various parties in the jet fuel pricing dispute to take into cognizance their corporate social contracts with Nigerians and come up with appropriate and acceptable pricing for aviation fuel similar to other petroleum products.

Earlier in his presentation, Executive Secretary of airline operators in Nigeria and Chief Executive Officer (CEO), Belview Airlines, Mr. Kayode Odukoya, accused the MOMAN of constituting itself into a cartel by fixing price of jet fuel without free and open market-bidding to determine appropriate pricing.

According to Odukoya, the cost of jet fuel in the country is about 50 per cent higher than some African countries, which had just emerged from both economic and political crises, such as the Gambia, Cote Dívoire, Liberia and Cameroun.

He said it was baseless to presume that the incessant rise in jet fuel was as a result of old stock tendered in the past when it did not reflect on other petroleum products. He urged the PPPRA to invoke its statutory powers to reverse the trend.

Responding to the allegation levelled against the MOMAN, Mr. Obafemi Olawore, who spoke on behalf of the body objected the allegation that his Association was a cartel. He argued that pricing for petroleum products is determined by certain key factors prevailing in any environments.

According to Olawore, the cost of jet fuel is determined by both internal and external factors such as cost of freighting, demurrage, landing cost, Nigeria Ports Authority charges, storage charges, foreign exchange cost and interest rate.

Reacting to questions on control and regulation of the activities of MOMAN, the Head of PPPRA, Mr. Wole Adamolekun said petroleum products marketers responded to government deregulation of the sector by pulling together their resources to import petroleum products and to sell them through competitive biddings.

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