Reps move to stabilise jet fuel prices, warn of looming airline collapse
By Gift ChapiOdekina
The House of Representatives on Tuesday called on the Federal Government to urgently intervene in the rising and unstable cost of jet fuel, also known as Aviation Turbine Kerosene (ATK), warning that the situation could trigger the collapse of domestic airlines if left unchecked.
The resolution followed the adoption of a motion of urgent public concern sponsored by Hon. Paschal Agbodike during plenary.
Moving the motion, Agbodike noted that jet fuel accounts for between 40 and 60 per cent of airlines’ operational costs in Nigeria, making it the single largest expenditure for operators. He said the persistent increase in the price of the product has placed significant strain on the survival of domestic carriers.
He stressed that despite the challenges, airline operators, in collaboration with the Nigerian Civil Aviation Authority (NCAA), have continued to strive to deliver safe and quality services to Nigerians.
The lawmaker, however, expressed concern that many airlines have been forced to cut down flight frequencies or ground aircraft due to the spiralling costs, resulting in reduced capacity across the sector.
According to him, the combined effect of high jet fuel prices and foreign exchange constraints, particularly in sourcing aircraft parts, has severely weakened the financial stability of Nigerian carriers, exposing them to the risk of collapse.
“The continued instability in jet fuel pricing, if not urgently addressed, could lead to the collapse of major domestic airlines, with devastating consequences for the national economy, employment and regional connectivity,” he warned.
Adopting the motion, the House urged the Federal Government, through the Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited (NNPCL), to enter into a direct price stabilisation arrangement with domestic airlines to ensure predictable and affordable fuel costs.
The lawmakers also mandated the Committees on Aviation, Petroleum Resources (Downstream), and Finance to investigate the causes of the jet fuel price hike and report back within two weeks.
In addition, the House called on the Minister of Aviation and Aerospace Development to present concrete measures aimed at reducing the cost of jet fuel.
It further urged the Central Bank of Nigeria (CBN) to prioritise access to foreign exchange for airline operators at favourable rates, particularly for the procurement of aircraft parts, in a bid to sustain operations and ensure safety in the aviation sector.
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