Domestic carriers have embarked on continuous delay and cancellation of flights due to disruption triggered by unavailability and high cost of aviation fuel.
Experts familiar with the matter say flight operations will be further disrupted because it is unclear when aviation fuel and this current situation may abate.
An oil marketer who spoke on conditions of anonymity said the recent price of crude globally is having huge negative impact on the local market.
The source hinted that airlines which are grappling to efficiently run and clear their credit on time will get the product faster than airlines purchasing the product on credit.
For the second day running , domestic airlines have put out apologies indicating that aviation fuel now sells between for ₦590-₦625.
Air Peace in a statement bordering on scarcity of jet fuel said it and other airlines have been facing scarcity of jet fuel supply.
The airline said it has tried to minimise the effect of the situation on its passengers travel plans but the scarcity is is making serious impact on its operations.
Arik Air which lamented it equally shared the same sentiments stressing that the commodity is unavailable and where it is available; it sells for between ₦590- ₦625 per litre.
It said it had to delay all its March 8, 2022 flights across networks while other flights were cancelled.
They both explained that passengers might experience of flight disruptions in the coming days until the situation improves.
Chief Executive Officer and Executive Secretary, Major Oil Marketers, Mr. Clement Isong while explaining the situation attributed what was happening to local airlines to the rise of crude in the international market, access to foreign exchange in Nigeria as well as better payment terms for the marketer.
Speaking particularly on domestic airlines’ inability to get the product and why it is higher he said, “Different airlines have different payment history. Some airlines make payment on time but there are some who have a history of owing, the airline’s who pay up ontime 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 airlines 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.
“And there is even something else the supply chain suffers, if you buy product a $10 and sell at $11 you make a profit of $1 and when you want to buy it now cost $12/$13 you need to find that money to buy at $13 and so some charge their customers in advance while others go and borrow from banks, if you go and borrow from the banks it becomes high.
Mr. Isong also addressed the problems of high cost of crude in the market and difficulty in accessing foreign exchange, stressing that suppliers are more liable to deal with people willing to pay in advance
He said, “The problem is two pronged: forex is expensive in Nigeria and the oil price in the international market is high and 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 world 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. If you pay in advance they are able to pay their own suppliers in advance; if you base on your credit you will still get the product but at a significantly lower price.”
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