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With Oil Price Surge, Nigeria Importing 100% Fuel Need, Subsidy Threatens to Cripple Economy
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With Oil Price Surge, Nigeria Importing 100% Fuel Need, Subsidy Threatens to Cripple Economy

*Low crude production volume, oil theft also major factors  *Minister of Finance laments widening budget deficit, says subsidy a huge problem *Experts: Petrol subsidy unsustainable, road to bankruptcy, identify local refining as ultimate solution  *NLC: Over 74% of petrol subsidy comprises insurance, freight charges, levies

 

*Jet fuel hits N670 per litre as NNPC promises to intervene *We may shutdown aviation sector soon, NCAA warns

 

Emmanuel Addeh, Udora Orizu in Abuja; Chinedu Eze, Nume Ekeghe and Dike Onwuamaeze in Lagos

As oil prices soar to record levels, many Nigerians, ordinarily, would expect that their country would be raking in billions of dollars and realising accretion in external reserves, as was the case in the past, especially during the Gulf War and some other international emergencies. Unfortunately, this is not the case.

 

 

 

Crude oil price hit $139 per barrel on Monday, but Minister of State for Petroleum Resources, Chief Timipre Sylva, said recently that the country would be comfortable with the price range of between $70 and $80 per barrel.

 

Analysts say the reason for this odd wish is the country’s huge fuel subsidy payment and its complete dependence on imported petrol to meet domestic consumption.

 

 

 

In addition, there is the problem of waning investment in the oil sector as well as massive oil theft that has gone unabated in the last few years and drastically reduced Nigeria’s crude oil export, leading to inability to meet the country’s OPEC quota. These factors have combined to ensure that the country does not benefit from the current soaring crude oil prices, buoyed by the Russia-Ukraine war.

 

 

 

For instance, in terms of rig growth, Nigeria’s count had fallen from 11 in September to nine in October 2021, according to data released by OPEC. This got worse after Nigeria began shutting down many of its offshore platforms as oil prices took a downward slope and the producers’ group embarked on production curbs to stabilise the market.

 

 

 

Historic rig count figures earlier obtained by THISDAY showed that in May 2020, the country’s producing oil rigs fell from 16 to eight and two months later, in July, it fell further to six.

 

In January 2021, only six rigs produced while in February, it was seven; in March, it fell to six again, while in April 2021, total rig count was just five.

 

 

 

In the oil industry, the rig count is a major index for measuring activities in the upstream sector.

 

Recently, a THISDAY review showed that Nigeria was producing far less oil than it did 25 years ago when the estimated population was lesser than what it is today and government spending was far below what it is in 2022.

 

A comparison of the country’s average oil production per day in 1997, as indicated in the NNPC yearly statistical bulletin, showed that while Nigeria pumped 2.344 million barrels per day, plus condensates, over two and a half decades ago, it can hardly produce 1.4 million as of this year.

 

 

 

Furthermore, while 26 rigs were in operation, on both onshore and offshore terrains, in 1997, Nigeria as at January this year had just about 12 active oilrigs, with about half of them not in use.

 

 

 

To underscore the gravity of the problem, just yesterday, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, lamented that the rise in crude oil price had further widened the country’s budget deficit.

 

Brent crude price stood at $112.43 a barrel yesterday, while the US West Texas Intermediate (WTI) crude rose 63 cents to $109.33 a barrel.

 

 

 

Concerned by the scarcity and high cost of aviation fuel, which has exacerbated flight delays and cancellations in the aviation sector, Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mr Mele Kyari, yesterday assured Nigerians that the company would work with relevant authorities to ensure that the current crisis in the aviation sector was resolved. Aviation fuel, which presently sells for N670 per litre, far higher than the N190 per litre sold about a month ago, is also imported 100 per cent.

 

 

 

However, the Nigeria Labour Congress (NLC) yesterday faulted the claim by the federal government that it would spend N3 trillion on petrol subsidy this year. NLC described the claim as bogus, unreal, insisting that the real government subsidy component in petrol consumed in Nigeria was N19 per litre.

 

 

 

But President Muhammadu Buhari recently requested the National Assembly to approve a total of N2.557 trillion for the federal government to fund fuel subsidy in 2022 after the current administration suspended its plan to remove the monthly under-recovery. This may be exceeded with the skyrocketing international crude prices.

 

 

 

The lack of funding for major upstream infrastructure has ensured incessant breakdown of existing assets. This has led to the highest single-month crude oil loss in a long time, as a result of disruptions due to maintenance and declaration of force majeure at the Forcados terminal and others in January.

 

 

 

Country Director of World Bank, Shubham Chaudhuri, recently said Nigeria’s decision to postpone the full deregulation of the downstream sector of the petroleum industry by 18 months might cost the country over N4 trillion in subsidy payments on petrol in 2022. Chaudhuri argued that for a purely economic phenomenon, Nigeria was not meant to make a political decision, adding that the decision to defer the subsidy removal will cost the country in fiscal terms.

 

 

 

It is estimated that with the current surging price of crude oil, Nigeria could be paying as high as N300 as subsidy per litre of petrol supplied at the pumps.

 

 

 

NNPC Limited recently disclosed that it spent N173.488 billion in excess of the budgeted N36.893 billion on petrol subsidy in January.

 

 

 

A document detailing the company’s presentation before the Federation Account Allocation Committee (FAAC) showed that instead of the projected under-recovery for the month, NNPC paid N210.382 billion for the purpose. During the month, NNPC had also failed to make any contribution to the Federation Account, although its forecast payment for January topped N122.7 billion.

 

 

 

To underscore the severity of the problem, in 2021, NNPC recorded a whopping deficit of approximately N2 trillion out of its projected N2.511 trillion remittances and was unable to pay roughly 80 per cent of its contribution to the Federation Account for the year.

 

Rising Crude Oil Price Has Widened Budget Deficit, Ahmed Laments

 

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, stressed that rising crude oil prices had widened the country’s budget deficit. Ahmed pointed out that the federal government was presently in the process of amending the budget to accommodate fuel subsidy.

 

 

 

The minister spoke yesterday at the 10th African Fiscal Forum titled, “The Political Economy of Fiscal Reforms,” organised virtually by the International Monetary Fund (IMF).

 

 

 

She said, “We are cleaning up our subsidies; we had a setback as we were to remove subsidy by July this year, but there was a lot of pushbacks. We have elections coming and also because of the hardship that companies and citizens faced due to the COVID and we were told that the timing was not right, so we pulled back.

 

 

 

“But we have been able to quietly implement subsidy in the electricity sector and as it is, as we speak, we don’t have subsidies in the electricity sector.

 

 

 

“Fuel subsidy is a huge problem for us. It has thrown up our deficit much higher than we planned. What is happening to the global oil prices is also going to, perhaps, worsen matters. But the current review we are doing is to say we will hold the subsidy at the level in which it is planned.”

 

 

 

Speaking on how much global prices would affect subsidy payment, Ahmed said, “We are currently doing a budgetary amendment to accommodate the incremental subsidy as a result of the reversed decision and we want to cap it at that.

 

 

 

“Hopefully, the parliament will agree with us and also at least contain the subsidies; otherwise, the way things are going now, we will not be able to predict where the deficit will be as a result of the fluctuation in the global markets.”

 

 

 

Commenting on increased revenue generation recorded by the country, she explained, “We have also enhanced our budget process. Three years ago, we had no government enterprise on the national budget, just the government itself. We started with 10, three years ago.

 

 

 

“Two years ago, we brought in 40 and now we have all the government-owned enterprises, which is about 61 agencies, in the national budget. So, we are able to see the whole of the revenue and the whole of the expenditure.

 

“This is enhanced also by automation in terms of the public financial management. As a result of that, we have been able to see the need to refine our fiscal laws.

 

 

 

“We have seen revenue from government-owned enterprises increase by 100 per cent within a 12-month period just by being able to pull everything together, put monitoring mechanisms, and being able to track and also put regulations and laws in the finance bill that caps the expenditure to revenue ratio of these government enterprises to 50 per cent. “So, we saw our revenue double and we are seeing the potential revenue from these enterprises again doubling in this current year as we speak.”

 

NLC: Over 74% of Petrol Subsidy Comprises Insurance, Freight Charges, Levies

 

NLC faulted a claim by the federal government that it would spend N3 trillion on petrol subsidy, describing it as bogus and unreal. The congress insisted that the real government subsidy component in petrol consumed in Nigeria was N19 per litre.

 

 

 

It alleged that over 74 per cent of what the federal government purported as subsidy comprised of insurance, freight charges, and levies imposed by government agencies, such as the Nigerian Port Authority (NPA), the Nigeria Maritime Administration and Safety Agency (NIMASA), and the defunct Department of Petroleum Resources (DPR).

 

 

 

President of NLC, Mr. Ayuba Wabba, said these during the Nigerian Economic Summit Group (NESG) webinar on “Impact Assessment of the 2021 Finance Act.”

 

 

 

Wabba, who was represented by the Head, Research Department, NLC, Dr. Onoho’Omhen Ebhohimhen, stated that NLC was not averse to privatisation of the country’s moribund refineries as long as it would follow the Nigerian Liquefied Natural Gas (NLNG) model.

 

 

 

The NLC president said, “For the purpose of clarity, what our government propagates as fuel subsidy does not fit into the logic, theory or the practice of subsidy. Subsidy, in macroeconomic theory, is provided to companies to help reduce production cost so that products can be passed on at lower cost in order to encourage consumption.

 

“What obtains in Nigeria about PMS are oligopolistic practices by agencies of the government of our country.”

 

NLC disclosed that Nigeria imported petrol largely from North West Europe.

 

 

 

It identified other components of the petrol price as insurance on vessels that bring in the product and insurance on the goods in transit, as well as the freight charges.

 

 

 

Wabba stated, “These three items I have mentioned are about 74 per cent of the petrol prices in our country. This is from government data that it spent 74 per cent on cost, insurance and freight of imported PMS.

 

“When the oil tanker comes into Nigeria it does not dock in our ports. It stays in the high sea while smaller vessels, called barges, are hired to offload the products from the ship to the storage facilities.

 

 

 

“We pay the tank farm owners for the storage. We pay the NPA, NIMASA, and DPR for market regulation. We pay NNPC for the cost of finance on the basis of opportunity cost model.

 

“All these are costs that are passed over to the consumers. But if you consider all these charges, you can then ask: where is the subsidy?

 

 

 

“What government calls subsidy is the landing cost of PMS, which comprised insurance, freight and local levies, taxes and its administrative charges. That is what they talk about as subsidy.

 

“If they are the subsidy, it means that the Nigerian government and Nigerian people are subsidising foreign countries and foreign businesses. That is not subsidy.”

 

 

 

NLC said the real subsidy component was about N19 a litre of petrol, made up of the bridging cost, retailers margin, and transport cost to different parts of the country.

 

 

 

The labour union leader said, “We pay transporters, we pay retailers margin, and we pay bridging cost. This may be considered as subsidies. But why are they there? We must understand their implications before we remove them. One fundamental implication is that the cost of production will go up.

 

 

 

“If you remove these subsidy elements, a manufacturer in Kano will not be able to compete with the one in Lagos. It will compound the uneven industrialisation we have in our country. If that is what the government wants to do, they should be honest and come forward to say so.”

 

 

 

Wabba believed the best solution to the fuel crisis is local refining of the product.

 

“Let us refine our products locally,” he stated, adding, “Warri and Kaduna refineries were established as refinery and petrochemical companies. But the petrochemical segment is dead because we are exporting our crude oil.

 

“Nigeria has experience in the construction and management of refineries. Buhari signed two agreements in 1977 to construct the Warri and Kaduna refineries. Warri was delivered in the middle of 1979. So, nobody can tell us that it is impossible to build refinery in two years. We have done it before. So, what has changed? Is it our capacity or vision that is lower now? Or has our government become different now?

 

 

 

“We as a labour congress are agreeable and committed to the privatisation of government’s refineries. But we give only one condition: let us prioritise based on a model that has worked for our country.

 

 

 

“Late Ernest Shonekan sorted the problem with NLNG within three months that his administration lasted in 1993. He ceded Nigeria’s interest in the NLNG to the private sector that have 51 per cent. Since then the NLNG has functioned well.

 

 

 

“We have said let us try that model in the refineries, but government drags its feet. Government is unwilling to do that.”

 

Petrol Subsidy Unsustainable, Road to Bankruptcy, Experts Insist

 

Economic experts and opinion leaders in the private sector said the current reliance on importation of refined petroleum products and subsidy on the pump price of petrol (PMS) had become clearly unsustainable and could plunge the country into bankruptcy.

 

They pointed out that Nigeria could only sustain the current subsidised consumption of petrol at a high cost of public borrowing.

 

 

 

They advised the government to accelerate domestic production of crude oil to enable the country satisfy its OPEC quota and earn more foreign currency to build its foreign reserves.

 

Economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, told THISDAY yesterday that subsidy was clearly no longer sustainable with the current development in the crude oil market, unless the intention was to plunge the nation into bankruptcy.

 

 

 

Yusuf projected that the subsidy budget might climb up to N5 trillion, while the expected revenue of the federal government is about N10 trillion, out of which N4 trillion would be devoted to debt servicing.

 

Yusuf said, “We are faced with a situation where the combination of debt service and subsidy payments would consume the entire revenue.  Yet we have to fund personnel cost, overhead expenditure and capital projects.  Where will the money come from?

 

 

 

“Are we going to depend on borrowing to fund these major line items? Are we going to continue to print money to fill these financing gaps, with the profound inflationary effects?

 

“We have some difficult choices to make if we must save the country from bankruptcy.  And we need to do so very quickly.

 

 

 

“We need to quickly revisit the conversation on the liberalisation of the downstream oil sector.  We need to urgently create a private sector window for the supply of petroleum products.  Clearly, NNPC cannot do this alone.”

 

Former Professor of Economics, University of Benin, and Chairman, Goldmark Education Academy, Professor Mike Idi Obadan, told THISDAY yesterday that the issue of sustainability of subsidy on refined imported petroleum products would continue to elicit more concerns under this circumstance as oil prices rise.

 

 

 

Obadan, who is also a non-executive director of the Central Bank of Nigeria (CBN) and a member of the Monetary Policy Committee said, “Subsidy payment may become unsustainable, except it has to be financed with more borrowing, which in itself the country should be wary of. The opportunity cost of increased subsidy payments is on the high side. However, if the government is able to do the needful to step up crude oil export, it will minimise the negative impact on the economy of increased subsidy payment implied by rising crude oil prices

 

“If Nigeria were to be able to raise oil production and export to take advantage of the rising crude oil prices, the undesired impact of the subsidy payments would have been mitigated. But this tends not to be so.

 

 

 

“Finally, there is need to fast-track the repairs of the public refineries to provide a basis for deregulation of fuel prices and, hence, elimination of subsidies.

 

 

 

“In this same direction, whatever support that could be given by the government to the Dangote refinery to fast-track its debut in the refined petroleum products market should be considered. All these actions will result in the early stoppage of fuel subsidy payments while the earmarked resources are freed for commitment to other sectors of the economy.”

 

 

 

Professor of Economics and Public Policy at the University of Uyo, Professor Akpan Ekpo, said the issue of sustainability of oil subsidy was a problem created by the government. Ekpo told THISDAY yesterday that the removal of fuel subsidies could only be initiated properly and effectively after the domestic refineries were made to work. He said it did not make economic sense for a country to export crude petroleum and import refined products.

 

 

 

Ekpo said, “Why are the refineries not working? First things first, get the refineries working so that Nigerians can be sure of refined products. Thereafter revisit the subsidy issue cautiously.

 

 

 

“Once the domestic supply is guaranteed, then subsidy can be phased out while providing succour to the poor through a kind of targeted subsidy. But let us not forget that most of what we call subsidy is corruption.”

 

He noted that there would be structural inflation once the subsidy was removed, and more untold hardship for Nigerians.

 

 

 

President of the Lagos Chamber of Commerce and Industry (LCCI), Michael Olawale-Cole, who spoke to THISDAY, recently, stressed the need for the government to get the refineries working again.

 

 

 

Olawale-Cole said, “The answer to all these problems is to ensure that we are adding value to our crude oil here and stop depending on imported refined products. That is the solution and it can be met by government showing commitment to ensure that our existing refineries are maintained and made to work.

 

 

 

“It is agonising that we are producing crude and exporting them abroad for refining and later import them at prices that we cannot afford. Naturally, this is going to affect inflation and add to the suffering of the people.”

 

The Independent Petroleum Marketers Association of Nigeria (IPMAN) said the organisation supported subsidy removal.  But he said certain measures must be put in place before it could be implemented.

 

 

 

Public Relations Officer of IPMAN, Chief Chinedu Ukadike, stated that for the sector to work optimally, it should be deregulated. However, Ukadike stressed that in-country refining must be achieved while pipelines should be fixed.

 

He stated that the current practice of going cap in hand when there was need to allow the forces of demand and supply take effect was not helping the sector.

 

 

 

Ukadike stated, “As it is now, we are not making any margin because it is regulated. Even when it is expensive, our margin remains N9.70. It has not moved. We do not want a regulated system.

 

 

 

“But local refineries, pipelines must be put to work. Government should encourage the establishment of modular refineries. We should be able to purchase products directly from our refineries.

 

“If the pipelines are good, you won’t see many trucks on the road, bridging gap will not be there. If the trains work, pipelines work, these issues may reduce.”

 

 

 

National President, Nigerian Association of Road Transport Owners (NARTO), Mr. Yusuf Othman, stressed that in a deregulated downstream sector, stakeholders would not need government consent before taking economic decisions.

 

 

 

Othman explained that when the forces of demand and supply were allowed to take firm root, the sector would flourish, because freight rate, for instance, will ordinarily increase with cost of transport across the country. “So I can tell you that we will do better under a deregulated system,” he said.

 

NNPC Promises End to Aviation Fuel Crisis, Says Price Reduction to N200 Per Litre Not Feasible

 

Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari, yesterday assured Nigerians that the company would work with relevant authorities to ensure that the present crisis in the aviation sector was resolved.

 

 

 

That was as Director General of Nigeria Civil Aviation Authority (NCAA), Musa Shuaibu Nuhu, warned that the aviation industry might soon be shutdown, saying with the current jet fuel scarcity, it is not safe to fly anymore.

 

Kyari gave the assurance while addressing the leadership of the House of Representatives, who were investigating the sudden scarcity and high cost of aviation fuel.

 

 

 

At the meeting well attended by members of the House Committees on Petroleum Downstream and Upstream, Jet A1 marketers, and airline operators, the NNPC GMD regretted the late intervention, saying all the supply data showed there was sufficient Aviation Turbine Kerosene (ATK) in the country.

 

Given the current situation, Kyari advised airline operators to have the right commercial arrangement with their support petroleum products, particularly ATK.

 

 

 

Kyari said, “Why we didn’t act was that all the supply data we have showed sufficient ATK in the country. This means that it may be in the wrong hands. There’s frenzy in the market today, no one knows what the price will be tomorrow.

 

 

 

“That’s still not an excuse for escalation of prices, we will work with the relevant authority to ensure that if there’s any such thing, we will deal with it jointly as an industry. We will work together to ensure that this is resolved.”

 

Addressing the demand by airline operators and lawmakers that the fuel price should be reduced to at least N200 per litre, Kyari said it was not feasible, as they had no control over it. He said the price was determined internationally price.

 

 

 

He said, “It’s impossible; today the landing cost of ATK is N480, the price, we have no control on that.”

 

Responding to concerns raised by the lawmakers regarding the crisis in the energy sector, despite the passage of the Petroleum Industry Act (PIA), the NNPC GMD said PIA passage was not a mistake. He said the company would work with other stakeholders to ensure gaps in the sector are closed.

 

 

 

“Whenever there’s supply gap it is our role to ensure that supply gap is closed, we will work with the authority and other stakeholders to ensure that if there’s any gap that’s existing we fill it,” Kyari added

 

In his presentation, Director General, Nigeria Civil Aviation Authority (NCAA), Musa Shuaibu Nuhu, warned that they might shutdown aviation industry soon as it’s not safe to fly anymore.

 

 

 

Nuhu said, “Over the last couple of weeks we have seen a significant rise in the cost of aviation fuel. One year ago it was selling at N190 per litre and as of this afternoon it has gone for N670 per litre, what this has done is that it has increased the cost of operations.

 

 

 

“This is a significant safety concern to us, if airlines cannot have enough financial margin to comply with all the mandatory requirement then we really have to look at, God forbid I don’t want to come before this committee to explain why something happened.

 

 

 

“Every day it increases. I won’t be surprised tomorrow if it sells for N700 per litre. Considering the ticket price now, the airline industry cannot survive. The option is we shutdown, because they cannot generate enough revenues to operate safely.”

 

 

 

Earlier, Chairman of Air Peace, Allen Onyema, who spoke on behalf of the airline operators appealed to NNPC to ensure that in the coming days, the price of aviation fuel dropped to N200 per litre.

 

Onyema said, “That’s the only time we will be able to operate safely and ensure some running of the schedule operations in this country. I don’t know how they will do it but they should, it will be good because even at N200 it’s a lot for the airlines. Not N400 or any other higher price, as we are talking now it will soon hit N700 and possibly N1000.

 

 

 

“What happened in the last two weeks is alarming. From a price of N190 per litre two weeks ago, the price is now N670 as at today and we don’t know what it is going to happen.

 

“The government has done so much for us in this industry with the president granting us waivers. We held a meeting and decided to shut down our operations because of the cost of operation. We are owing so much money and we don’t want AMCON to come after us.”

 

 

 

Onyema added, “We cannot survive like this for another three days. We had to reduce our operations to 30 per cent because the product is not even available. So, I am surprised that the Executive Director said they have supplies to last 34 days. We are making so much sacrifice here.

 

 

 

“I am evacuating Nigerians from Poland and I had to pay three times the usual amount and I am not asking for a refund. So, something needs to be done and done fast.”

 

 

 

On his part, Executive Director, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ogbugo Ukoha, noted the role of the agency in regulating the industry, and issuing licenses to importers of the product. Ukoha said from his records, there was enough aviation fuel to last the country for 34 days. He also said that aviation fuel was one of the petroleum products that had been fully deregulated and was, therefore, controlled by market forces, adding that the authority has issued licenses to about 28 companies to import the product into the country.

 

 

 

But his explanation did not go down well with Deputy Speaker, Hon. Idris Wase, and other lawmakers.

 

Wase questioned why there should be scarcity of the product if there was enough supply to last for 34 days, alleging that there must be a cartel working hard to sabotage the efforts of the government.

 

 

 

Former CEO of Aero Contractors, Captain Ado Sanusi, told THISDAY on Wednesday that due to the scarcity and high cost of aviation fuel, fuel marketers now gave airlines new conditions for selling the product.

 

The marketers insisted that airlines must pay before the product was supplied to them, an aberration in an industry globally known for payment after purchase of the product.

 

 

 

Sanusi said, “You pay for fuel in advance, which is not done in the aviation industry. It will make operations very difficult and lead to more delays and cancellations. You cannot deposit money before you buy fuel.

 

 

 

“If nothing is done urgently, this may lead to the beginning of airlines going down because they cannot continue operating like this. The federal government should urgently look for solution to the problem.”

 

Sanusi said government must intervene by doing away with the middlemen, but allowing marketers to import the product and sell directly to the airlines.

 

 

 

He said, “These middle men don’t understand aviation. The marketers are part of the industry whose operations are approved by the Nigerian Civil Aviation Authority (NCAA). Ideally, the airlines can buy from the marketers who will issue them invoice and they pay in 24 to 48 hours.

 

 

 

“This is the way it is done. You cannot even deposit money with the marketers because if you do, they may not even have the product at the time you want it because of uncertainty and volatility in the supply of the product. If care is not taken, Nigerian airlines may go down.”

 

 

 

THISDAY also spoke with Managing Director of Clean Serve Energy Limited, Chris Ndulue, who explained the challenge the aviation fuel marketers were facing.

 

 

 

Ndulue stated, “There are three basic things: the cost of crude oil in the international market and the price of the dollar. We have failed to refine fuel locally, so we have to import. The price of crude oil has been rising and the price of dollar has been rising. Supply of the product has been facing disruptions because there is war in Europe. There is scarcity because people have not been producing, so price is rising. We need to start producing refined product here.

 

 

 

“The price of diesel has risen, that it is over N600. We need to refine crude oil here so that we end these disruptions and high prices,” Ndulue said.

 

 

 

THISDAY findings show that airlines spend huge operating fund on purchase of aviation fuel. A Boeing 737 Classic, for instance, consumes about 2, 300 -2, 500 litres of aviation fuel for one-hour flight. Airbus A320-200 consumes about 3, 125 litres of aviation fuel or 2,500kg per hour.

 

 

 

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