Energy

Nigeria to stop importing fuel by 2019 – FG

Published

9 years ago

on

February 9, 2017

By

Feyijimi Emmanuel

The State Minister for Petroleum Resources, Ibe Kachikwu, has said the federal government plans to stop importing refined petroleum products into the country by 2019.

He said the foreign investors had signed a deal with the Nigerian National Petroleum Corporation, NNPC, to repair refineries within two years. He said the refineries would produce about eight million litres, about 40 percent of daily consumption.

Kachikwu also stated that business mogul, Aliko Dangote, had begun constructing one refinery.

Speaking on the issue of subsidising fuel pump price, he said the current price was a result of market forces.

Related Topics:Fuel importation Ibe Kachikwu Minister for Petroleum Resources Nigerian National Petroleum Corporation (NNPC)

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Rising Tensions Between Regulators and Airlines The financial strain has coincided with renewed friction between the Nigeria Civil Aviation Authority (NCAA) and the Airline Operators of Nigeria (AON), following disputes over the remittance of statutory charges and the delivery of regulatory services. Operators say the situation reflects deeper systemic liquidity stress across the sector, where airlines are increasingly unable to meet overlapping obligations imposed by aviation agencies while maintaining operational stability. A Layered and Fragmented Tax System At the centre of industry complaints is what operators describe as a “multi-layered and excessive” taxation structure involving the NCAA, the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Airspace Management Agency (NAMA). 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Leasing Constraints and Foreign Exchange Pressure Airlines’ challenges are compounded by difficulties in aircraft acquisition and leasing, which remain essential for fleet expansion in the absence of strong local financing options. Most carriers rely on wet and dry lease arrangements from international lessors. Wet leases, which include aircraft, crew, maintenance, and insurance, allow quick capacity deployment but are costly and typically paid in foreign currency. Regulatory limits also restrict their use to short-term arrangements. Dry leases offer more operational control and long-term stability but are increasingly difficult to secure. International lessors often view Nigeria as a high-risk environment due to concerns over aircraft repossession and currency volatility, resulting in higher insurance premiums, security deposits, and financing costs. As a result, airlines are frequently forced into short-term leasing agreements, exposing them to exchange-rate fluctuations and operational disruptions that contribute to flight delays and cancellations. Fuel Costs Deepen Financial Strain Jet A1 fuel remains one of the largest cost drivers in the sector, further squeezing margins across domestic routes. With fuel expenses, taxes, and leasing obligations combined, industry analysts say many airlines are operating with extremely narrow or unstable margins. Operators warn that without coordinated policy reforms, sustained profitability and expansion in the sector will remain difficult. Calls for Structural Reform Aviation stakeholders are calling on the federal government to streamline overlapping charges, review the newly introduced 5% levy, and consider removing VAT on aviation inputs to ease cost pressures. 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