Business

Aviation Fuel: Domestic Airlines Risk Shutting Down Over Rising Price Of Jet A1

Published

1 year ago

April 1, 2024

Indications have emerged revealing that some domestic airlines may cease operations over the rising price of aviation fuel, otherwise known as Jet A1.

Given that there has been a sustained increase in the price of aviation fuel over the last two years, airlines have been forced to enhance their operations by raising ticket prices.

In less than eight months, specifically between July 2023 and February 2024, the product’s swinging price saw local carriers struggle with 109 per cent price increment.

The 12 scheduled airlines in the country, including Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet and United Nigeria Airlines, UNA, had made efforts to stay in business, even as the price of jet fuel surged from N629 to N1,316.

With the situation no longer sustainable, some airlines are looking at discontinuing operations, Vanguard has gathered.

Fluctuations

Although efforts to get the price of jet fuel as of press time failed, Chief Operating Officer of Ibom Air, Mr George Uriesi, told Vanguard that it was fluctuating between N1,300 and N1,500.

Uriesi said: “It is a massive challenge because fuel is the major cost. In two years, it has gone from about N200 to N1,500. No matter how prudent an airline is, it cannot absorb that kind of increase in the major cost input. The increase is so massive that it is difficult to attack by raising fares. We think that we have reached the plateau in terms of using fares to absorb all these inflationary issues – the value of naira and increase in price of fuel, which are the two most important components for a domestic airline.

Reached the zenith

“I think we have reached the zenith of how much we can charge higher for people to travel without stopping them from buying tickets. What I can say right now is that the recent strengthening of the Naira was just like an oxygen mask for the domestic airlines because it had reached the point where it was no longer sustainable. I don’t think any other group of airlines in the world faces the challenges that Nigerian airlines face.”

Refining

Managing Director of Aero Contractors, Captain Ado Sanusi, in a chat with Vanguard, also warned that if the country does not start refining Jet A1, the situation might worsen.

He said: “Cost has been skyrocketing and from the normal 35 to 40 per cent of airlines’ cost, it has now jumped to close to 80 per cent. And in some cases, 90 to 95 per cent. It means when tickets are sold, 90 per cent of the ticket goes to buying Jet A1. It’s a direct relationship. When the price increases, cost increases.

“Airlines increase the prices of their tickets and transfer the cost to the customer. Until we start refining jet fuel in the country, we will depend on imports. While we are depending on import, we are looking at the cost with a naira to dollar exchange rate. I don’t know whether Dangote and Port Harcourt refineries are equipped to refine Jet A1, but even if they are, it would take a little bit of time before we feel the impact.”

Cartel

While calling on Federal Government to make importation of jet fuel transparent, Sanusi said: “If the federal government can make the importation as transparent as possible, I think it will give the airlines a picture of what the price will be. If the price can be published by the Department of Petroleum Resources, DPR, we will know the price and that there is no cartel fixing the price. If they do that, I think it would stabilize the price because right now, some airlines are struggling and some will continue to struggle until they struggle no more and then give up.”

VANGUARD

Business

First Bank: Controversy Trails Multi-billion Naira Shares Deal

Published

4 days ago

July 18, 2025

Editor

There seems to be uncertainty around the share sales and purchase deal between Oba Otudeko, Hassan Odukale on one hand and Femi Otedola on the other in First HoldCo, the parent company of First Bank.

The deal delivered an unprecedented quantum of the financial group’s shares to Otedola, the current Group Chairman of First Holdco, from the shareholdings of Odukale and Otudeko, the two immediate past chairmen of the group.

Also the deal ramped up Otedola’s holdings in the Group to an unprecedented level of 40%, the largest in the history of the bank and also largest single shareholdings amongst the tier-1 banks in Nigeria.

However, when Vanguard contacted the Nigerian Exchange Limited, the Spokesperson, Clifford Akpolo, said: ”I am not aware of these transactions as the NGX Reg has not notified the NGX.”

The NGX trading rules required that a sale or purchase of shares up to 5% must be notified to the NGX Reg. The deal covered about 25% of the bank’s total shareholding.

Similarly, First Bank’ s spokesperson, Mr. Ismail Omamegbe, did not respond to a text message sent to him, nor responded to calls in respect of the deal.

But sources in the bank indicated that the deal was executed off-trading floor and in connection with the long-drawn battle between the current board of the bank group and the two former board chairs who opted to surrender their shares for the bank to drop legal proceedings against them.

The deal, executed through 17 negotiated trades at ?31 per share, involved the transfer of 10.43 billion units of FBN Holdings shares and is estimated to be worth over ?324 billion.

The acquisition, confirmed by trading data and capital market sources, marks a turning point in the ownership structure of one of Nigeria’s oldest and most prominent financial institutions.

The buyer in all 17 deals was First Securities Ltd, while the sellers included CardinalStone Securities, Meristem Stockbrokers, Renaissance Capital, Regency Asset Management, Stanbic IBTC Stockbrokers, United Capital Securities, and First Securities Ltd (acting as both buyer and seller in select trades).
(VANGUARD)

Business

South-South Contributed Over 21% Nigeria’s GDP In 2024 – Banker’s institute

Published

4 days ago

July 17, 2025

Editor

The President of the Chartered Institute of Bankers of Nigeria, Prof. Pius Olanrewaju, has stated that the South-South region contributed N34 trillion to the country’s economy in 2024.

He made the remark at the South-South Zonal Banking and Finance Conference in Calabar on Thursday.

He spoke on the theme, ‘Building An Inclusive South-South: Economic Diversification as a Catalyst For Development.’

Olanrewaju, who quoted the data from the Cable Data Index, said the feat was more than 21 per cent of Nigeria’s real Gross Domestic Product.

The president described the growth as “impressive,” saying that it was not driven by oil alone but significant expansions in trade, services, and the creative industries.

According to him, to fully harness this potential, coordinated financial, technological, and policy support is essential.

“As we work to reposition the South-South for broad-based prosperity, the financial system must play a central role, not merely as a source of capital, but as a catalyst for innovation, ideas incubation, and inclusive economic growth.

“This conference, therefore, provides a strategic opportunity for stakeholders to reimagine the South-South economy, not merely as a resource belt, but as a region of diverse capabilities and resilient enterprises,” he said.

Olanrewaju added that Nigeria must move beyond old models and chart a new course for the development of the South-South region, where financial institutions and stakeholders collaborate to diversify the economy for shared prosperity.

He, however, commended Governor Bassey Otu for his pledge of land for CIBN Secretariat in Cross River and being the first sitting governor to willingly undergo and complete the Chartered Bankers Programme.

On his part, Otu said that the conference discussion on the economic diversification in the South-South region was timely against the backdrop of global trade and economic volatility that was affecting the nation’s economy.

Represented by his deputy, Mr Peter Odey, Otu said the South-South region must now act with urgency to diversify its economy while leveraging its shared natural endowment in agriculture and extractive resources.

“This conference must help develop tailored financial solutions that reflect the unique strengths and realities of states like Cross River in the south-south.

“Diversification should be evidence-based and must be backed not just by financial advice but project-focused financing and real investment support,” he stated.

He said that Cross River had taken the bold step to invest in its agricultural sector by launching an agro-processing hub.

Otu further said that the state had invested in aviation by acquiring more aircraft for Cally Air, constructing the Bakassi Deep Seaport and injecting N18 billion in its tourism sector.

Similarly, the Cross River Branch Controller of the Central Bank of Nigeria, Mr Tolefe Jibunoh, said that the region was blessed with natural resources, cultural diversity and immense human potential.

Jibunoh, who was represented by Head, Currency Control Office, CBN, Calabar, Mr Segun Shittu, noted that strategic diversification could unlock unprecedented opportunities for growth in the region.

He added that the CBN remained steadfast in maintaining monetary possibilities and promoting a sound financial system as a catalyst for sustainable economic development for the benefit of all.

NAN

Business

Naira Rises In Parallel Market

Published

6 days ago

July 15, 2025

Editor

The naira today appreciated to N1,545 per dollar in the parallel market from N1,550 per dollar last weekend.
Likewise, the Naira appreciated to N1,528.65 per dollar in the Nigerian Foreign Exchange Market (NFEM).

Data published by the Central Bank of Nigeria, CBN, showed that the exchange rate for the naira fell to N1,528.65 per dollar from N1,532 per dollar last week Friday, indicating N3.35 appreciation for the naira.

Consequently, the margin between the parallel market and NFEM rate narrowed to N16.35 per dollar from N18 per dollar last weekend.