put the word ‘yet’.”
Airline operators may have fought a lost battle with oil marketers over the price of aviation fuel.
The airline operators had threatened they would ask the government to give them license to import aviation fuel, a demand, oil marketers said they are not opposed to.
The airline operators had kicked against what they considered an arbitrary increase in the price of aviation fuel by the marketers. Because of this, they threatened to stop operations.
This development made the Nigerian National Petroleum Limited (NNPC)’s, group managing director, Mele Kyari, to intervene in the matter with a resolution that the marketers should sell fuel to the operators at a rate of N500 per litre
But the settlement NNPC brokered could only give a respite of 10 days to the airline operator. As matter of fact, this arrangement has since elapsed last week according to an oil and gas source.
The aviation operators believe the oil marketers were cheating them. But the beauty of it is that Azman air which also has an oil marketing company arm, the marketers claimed was always carried along in whatever they are doing so that Azman would also relate it to other airline operators.
In an attempt to find a lasting solution to the problem both parties held joint meetings that lasted for four days. The essence of the meeting was to make sure the airline operators understand the processes and operations of the marketers and how they arrived at the prices they give them.
Eventually, the airline choose a format that was considered by both parties as very transparent to everybody but make the fuel more expensive than what the marketers were offering the airlines.
An official of one of the marketing companies told Business Standards that this new format is better for them because it does not disturb them from adding their margins.
“If we are the one selling to them they would ask for discounts, but now, they have to consult Platts for the price and also go to the black market to see how much is the price of forex before they come to us for the product. They know we were using platts of 30 days, they know that the forex is from the black market.”
“So if they want to get anything they should for platts and black market prices for forex to know where these two items stand, it is after that the marketers would add their margin and distribution cost so how did want to get the fuel price at a lower cost.”
He said what caused the problem was that the fuel the marketers brought at a lower cost, the marketers felt they can also not sell to the airlines at a lower rate which was what the airlines demanded.
Selling it cheap would mean they would not be able to access Platts for the next round of products they planned to bring in. Now platts has become the benchmark for the transaction
Olusola Bello