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Air Passengers Stranded as Aviation Fuel Scarcity Bites Harder Nationwide

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  • Air Passengers Stranded as Aviation Fuel Scarcity Bites Harder Nationwide

Air passengers in Nigeria are stranded at airports nationwide, as airline operators jostle for aviation fuel, amidst scarcity that is getting worse.

On Tuesday, the passengers, some of whom were on transit, waited endlessly for the departure hall. While few were lucky to later travel, others were later informed that their scheduled flights had been cancelled.

Aviation fuel, otherwise called Jet-A1, is a specialised type of petroleum-based fuel used to power aircraft and normally accounts for over 30 percent of operation cost of an airline.

Jet-A1 is 100 per cent imported into Nigeria and subject to fluctuations in the foreign exchange market. In the last 12 months in Nigeria, aviation fuel has steadily climbed from N104 to N240 per litre in Lagos and as high as N270 in northern part of the country.

Flight delays and outright cancellations means that air travelers are unable to meet scheduled appointments at their respective destinations. In extreme cases, this may also result to huge loss of revenues for those hoping to seal some business deals.

At the General Aviation Terminal (GAT) of Murtala Muhammed Airport (MMA), Lagos, for instance, about three out of every four flights were cancelled, with operators citing “operational reasons”.

The Guardian learnt that one of the airlines operating at the GAT, in fact, cancelled all flights on Monday, and left passengers to learn of the development on getting to the airport.

At the Murtala Muhammed Airport II (MMA2) Terminal, also in Lagos, airlines like First Nation, Med-View, Azman and Dana Air were carrying out services but behind schedule.

A passenger at the GAT, Emmanuel Egboh, told The Guardian that he had been stranded at the airport in the last two days trying to fly to Uyo, Akwa Ibom State.

Egboh said: “This is a flight I had booked since last week. I got here on Monday, only to be told that the flight has been cancelled. No call, no text message, no mail, nothing. Canceled just like that. They said there is no fuel. I’ve been at the airport since morning (Tuesday), the same flight has been delayed for four hours. It is still not certain if we will even fly today.”

Spokesman for Arik Air, Banji Ola, said the airline is the worst-hit due to the huge volume of fuel it required daily to run over 100 flights, but has “drastically been in short supply of the commodity in the last three weeks.”

Ola said that the airline required about 500,000 litres of fuel daily and 150,000 for the Lagos-London operations alone.

He said: “We have not been able to get anything close to the daily requirement and that is why it is affecting us heavily. We are working hard to carry out our schedule and trying to reorganise ourselves to cope with the challenges.”

Aviation fuel marketer, Olasimbo Betiku, explained that the scarcity is due to the lingering problem of foreign exchange hike and scarcity of dollar to import sufficient aviation fuel into the country.

Betiku said t was unfortunate that the government has still not started refining the product at the Kaduna and Port-Harcourt refineries, as promised some months ago, otherwise, Nigeria would not be talking of aviation fuel scarcity by now.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

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Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

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Crude Oil

Oil Prices Edge Higher Amidst Fear of Middle East Conflict

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Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

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Commodities

Geopolitical Uncertainty Drives Gold Prices Higher Despite Fed Rate Cut Concerns

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As tensions simmer in the Middle East and concerns loom over Federal Reserve policy, gold continues its upward trajectory, defying expectations and reinforcing its status as the ultimate safe-haven asset.

The latest surge in gold prices comes amidst escalating geopolitical tensions in the Middle East.

Reports suggest that the United States and its allies are bracing for potential missile or drone strikes by Iran or its proxies on military and government targets in Israel. Such a significant escalation in the six-month-old conflict has sent shockwaves through financial markets, prompting investors to seek refuge in gold.

Despite initial setbacks earlier in the week, gold resumed its blistering rally, buoyed by the specter of geopolitical uncertainty.

On Wednesday, the precious metal witnessed its most significant decline in almost a month following a hotter-than-expected US inflation readout.

This unexpected data led traders to recalibrate their expectations for Federal Reserve interest rate cuts this year, causing the yield on 10-year Treasuries to surge above 4.5%.

However, gold’s resilience in the face of shifting market dynamics remains remarkable. Even as concerns mount over the Fed’s rate-cutting trajectory, the allure of gold as a safe-haven asset persists.

Prices hover just shy of a record high reached earlier in the week, propelled by robust buying from central banks.

Market analysts interviewed by Bloomberg anticipate further gains in gold prices, citing continued geopolitical tensions and strong momentum in the market.

The precious metal’s near-20% rally since mid-February underscores its enduring appeal as a hedge against uncertainty and inflationary pressures.

At 9:54 a.m. in Singapore, spot gold rose 0.3% to $2,341.58 an ounce, signaling continued investor confidence in the metal’s resilience.

The Bloomberg Dollar Spot Index, meanwhile, remained relatively unchanged near its highest level since November.

Silver, often considered a bellwether for precious metals, held steady after reaching a three-year high, while platinum and palladium also registered gains.

As the world navigates through a complex web of geopolitical tensions and economic uncertainties, gold remains a beacon of stability in an increasingly volatile landscape.

Its ability to weather market fluctuations and maintain its allure as a safe-haven asset reaffirms its timeless appeal to investors seeking refuge amidst uncertainty.

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