The Minister of State for Aviation, Senator Hadi Sirika has directed aviation agencies to recover the huge debts owed them by airlines and terminal facility operators before the end of September.
Sirika who gave the directive stated that the government needs the money for the development of the industry and remittance to federation account. Agencies are required to remit 25 percent of their earnings to the federal government account to enable the government meet its obligations to the people.
Sequel to the directive, the agencies such as the Federal Airports Authority of Nigeria (FAAN) and the Nigeria Airspace Management Agency (NAMA), have intensified their debt collection drive and have forced airlines to abort their operations.
It was also gathered that some of the airlines have started paying up the debts while some have met the agencies to reconcile their debts and work out repayment plan.
Also, the pay as you go policies of NAMA and FAAN have been reinforced to ensure that henceforth airlines do not owe the agencies.
A source at NAMA disclosed to journalists that the agency is owed N8.08 billion; the Nigeria Civil Aviation Authority (NCAA) owed N12billion, while FAAN is owed N20billion as at the time of filing this report.
ThisDay gathered from NCAA said it has introduced no-pay, no-service policy, whereby every airline must pay before the agency would attend to its needs such as issuing certificates to its crew, aircraft inspection after maintenance among others.
ThisDay also reliably learnt that almost all the debts are owed by domestic airlines as the International Air Transport Association (IATA) collects charges from international operators for the aviation agencies.
Another source said that some of the airlines are finding it difficult to reconcile their debts with some of the agencies due to the absence of transparent system to document the debts with evidence of the provision of service as it is done in other parts of the world. Some of the airlines, according to source, believe the debt that accrued to them was exaggerated and they are shortchanged because they are being forced to pay for the services that were not rendered to them by the agenciies.
Also an airline official told journalists that if airlines were able to maximise their equipment and operate up to 14 hours a day, they would generate enough revenues to offset their charges and taxes, but expressed the regret that the circumstances have forced airlines to perform grossly below maximum capacity.
“Most airports do not have airfield lighting so you cannot operate there in the night; there is no aviation fuel and this impedes flight operations and leads to cancellation and delay of flights and the price of aviation fuel has become outrageous because it is scarce. Besides, there are some of the charges that are inexplicable; that seem as if government wants to stifle air operations in Nigeria, if not I don’t see why they should be charging VAT on air transport.
Government must increase waivers it gives to airlines so that they could operate profitably. Air transport is the catalyst of the economy and without it the economy will be adversely affected,” a source told ThisDay.
Another operator said that while the minister’s directive was in order, it is his responsibility to ensure that the necessary infrastructure is in place to ensure seamless flight operations, noting that it was unrealistic to insist that the airlines should pay all their debts knowing that there is no airline in the world that is not indebted. The operator added that government’s inaction in providing the necessary facilities that inhibits the airlines from maximising their operation.
“Government should know that if it wants the airline industry to grow it has to cut down on these charges. That is a way of supporting the airlines. It should also know that if airfield lighting is working in 10 out of the 22 airports built by the federal government, airlines could operate into the night in these airports. But it is only four airports that have working airfield lighting,” he said.
Crude Oil Dips Slightly on Friday Amid Demand Concerns
On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.
Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.
Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.
The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.
This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.
Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.
Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.
While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.
Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal
Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.
The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.
Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.
However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.
This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.
August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.
The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.
Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.
Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.
Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.
Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.
He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.
Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.
The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.
Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.
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