THE Chairman of Major Oil Marketers Association of Nigeria (MOMAN) and Group Chief Executive Officer of Oando Group, Mr. Wale Tinubu, has blamed the rising cost of aviation fuel on the high cost of crude oil at the international market.
However, some major oil marketers have called on airlines to streamline their activities.
Tinubu, who made the observation recently in Lagos, also noted that most of the airlines were finding it increasingly difficult to buy aviation fuel on cash-and-carry basis.
According to him, the tight credit has made it difficult for the airlines to raise cash to buy aviation fuel, stressing that most of them depended on buying on credit.
In his words: ‘First of all, aviation fuel sector has been deregulated for over 10 years.
The only problem is that most of the airlines don’t have money to pay. So, we don’t sell to them, when they don’t have. We (Oando) have N1billion of bad debt from the airlines. So, we have stopped giving them credit. The money we have belongs to our shareholders. We cannot take our shareholders’ money or bank money and give to the airlines.’
He cautioned major oil marketers in the country to reorganise their operation as part of measures to cope with the rising cost of aviation fuel, adding that their inability to restructure their businesses in line with the global practice would land them to difficult operation.
However, other chief executive officers of some oil marketing companies, who spoke on condition of anonymity, said majority of the airlines were no longer credit-worthy because of the way they schedule their flight operations, while another highly placed official of a major oil marketer observed that the airlines schedule all their planes to go to one route at the same time.
He said this had resulted in planes carrying only few passengers in their return trips.
‘You cannot have 10 flights going to Abuja from Lagos, all at the same time. In other parts of the world, you come off one plane in one location and connect to another city. But all our planes go to one location at the same time and come back empty,’ he said.
Another marketer stated that unless the aviation industry is restructured to ensure collaboration among the operators, the sector would continue to experience flight cancellations due to their inability to afford the cost of aviation fuel.
‘There is no coach sharing; there is no collaboration of efforts. Until they do these, they will continue to have problems. Our business is to sell fuel and we sell fuel only to airlines that are credit-worthy.
We sell to those, who can pay our bills unless the Federal Government wants to subsidise aviation fuel and this will cost additional $2 billion. That means we will have no roads, bridges and hospitals, because all the money will be spent on payment of fuel subsidy,’ he said.
Source: http://www.momentng.com
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