Aviation analyst, Olumide Ohunayo, has said the plans by Dangote Refinery to begin direct supply of aviation fuel, also known as Jet A1, to airlines in Nigeria will not work.
He said this is because there are registered marketers with facilities around airports who are supposed to supply aviation fuel to the airlines.
Ohunayo, who is the General Secretary of the Aviation Safety Roundtable Initiative, stated this while reacting to the news of plans by Dangote Refinery to directly supply aviation fuel to airlines.
“I think that the plan of Dangote selling Jet A1 fuel directly to airlines will not fly because there are registered aviation fuel marketers in place who are regulated and pay their taxes,” Ohunayo stated in an interview on News Central on Tuesday.
A report by the Punch said a senior official of the Dangote Group confirmed the move, adding that the $20 billion refinery plans to supply aviation fuel directly to airlines in Nigeria at N1,820 per litre.
This comes as the refinery’s CEO, David Bird, confirmed that the refinery has already commenced direct supply of Jet A-1 to Ethiopian Airlines.
The plans for direct sale to airlines is coming at a time when domestic airline operators are lamenting the high cost of aviation fuel. The Airline Operators of Nigeria had accused major fuel marketers of selling aviation fuel to airlines at over N3,000 per litre, a surge of about 300 per cent in two months.
AON alleged that the price was at variance with the rate of increase in oil prices in the international market, especially since the onset of hostilities in the Middle East that led to supply disruption, with the closure of the Strait of Hormuz.
However, Ohunayo said what stakeholders had pushed for was the removal of middlemen, who are capitalising on the Middle East crisis to artificially inflate the price of aviation fuel while supplying to airlines at airports.
He said there are two sets of middlemen – the one between Dangote Refinery (who are registered fuel marketers) and another group that offtakes from the marketers and supplies to airlines (pumping directly to aircraft at airports).
“The second group of middlemen is those that create the artificial scarcity,” Ohunayo stated.
“I think that idea of Dangote selling directly to airlines will not fly,” he added.
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He said there are registered fuel marketers who are supposed to be the ones to move aviation fuel, whether from the Dangote Refinery or imported, straight to aircraft at airports.
“What happened during this period is that we have some very ludicrous middlemen that came in to bring in that artificial price.”
He criticised the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for what he described as “poor monitoring of pricing and distribution” that led to an artificial hike in the price of aviation fuel.
He commended the removal of the NMDPRA Chief Executive recently, adding that the regulator shouldn’t have dropped the ball and allowed middlemen to capitalize on the situation.
According to him, one of the things agreed during the stakeholders’ meeting convened by the Federal government recently to address the aviation fuel crisis was that Dangote Refinery should be publishing its depot price for transparency and enable everyone to know what to expect as the pump price.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X