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Deregulation: FG Moves Against Sabotage

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The Federal Government yesterday moved to checkmate those who may want to scuttle fuel supply in the country ahead of the planned January 2010 take-off of the deregulation of the downstream sector of the petroleum industry.
The government through the Nigerian National Petroleum Corporation (NNPC) ordered for the importation of 90 cargoes of Premium Motor Spirit (PMS), 28 cargoes of Dual Purpose Kerosene (DPK) and 10 cargoes of Automative Gas Oil (AGO).
It again declared that there was no going back on the planned deregulation of the downstream sector of the petroleum industry and warned that erring marketers who indulge in acts that are capable of jeopardising the exercise would risk severe sanctions.
Reading the riot acts in a meeting with major and independent oil marketers and other stakeholders, Acting Director of the Department of Petroleum Resources (DPR), Mr. Mr. Billy Agha, said the DPR, an agency saddled with the responsibility of regulating the petroleum industry, had braced up with the expected challenges and had taken steps to deploy resources at its disposal to ensure that products distributed to dispensing points were monitored and made available to the public as intended.
He said the massive importation was designed to meet the country’s ever increasing fuel needs during the forthcoming Muslim and Christian festivities that will precede the January 2010 new take-off date of deregulation.
Agha reminded the marketers that they had a critical role to play especially in products distribution and supply and advised them to shy away from actions that are inimical to the successful deregulation of the petroleum sector.
“NNPC has indicated that their coverage of the market is premised on the fact that there may not be supplies coming from third parties, while assuring sufficient and robust supply of the indicated products within this critical period,” he said.
Agha, who expressed concern about the sharp drop in the number of applications for permits to import Premium Motor Spirit and kerosene by major and independent marketers of product, appealed to the marketers to take it as “sacrifice” and continue products importation to ensure availability of adequate supplies in the country.
He said: “It is our fear that in the event of not being able to flood the markets, as anticipated during the critical period, the supply chain will be affected which may lead to scarcity, hoarding of products, diversion and other associated ills of scarcity, the most notable of which is the reduced trucks load-out from the storage depots/facilities” .
While noting that “deregulation would phase out monopoly and allow market forces to dictate the price”, the DPR boss cautioned against hoarding and diversion of products, noting that anybody caught in such act would be punished.
“The key players should get ready for deregulation and be ready to play a critical role so that it could be a success and all of us will move on to the promise land.
There is no going back on the deregulation. The time I do not know, but what I know is that we are deregulating the sector. No going back.
“We therefore appeal to all marketers to as a mater of fact have the interest of the public at heart, and to shy away from actions that are inimical to the successful deregulation of petroleum products in the country. The DPR would not hesitate to impose the necessary sanctions on the erring marketers found violating the laws,” he warned.
Responding, the marketers complained that notwithstanding that government is yet to pay the huge amount owed them as outstanding subsidy, they had gone ahead to secure permit to import products but were not granted approval by the Petroleum Product Pricing Regulatory Agency (PPPRA).
They accused the Federal government of failing to follow due process in the deregulation exercise and of not providing the conducive operating environment that will make it succeed.
The government had recently announced that the planned deregulation initially scheduled to take off on November 1, 2009 would now kick-off by January 2010. However, marketers are of the view that a situation where the NNPC is allowed to monopolise fuel importation will create monopoly and endanger competition.
Meanwhile, Shell Petroleum Development Company (SPDC) last week resumed operations at its Soku gas plant located in Akuku-Toru Local Government Area of Rivers State, after 11 months of closure, a company spokesman confirmed yesterday.
The Federal Government lost over $180 million liquefied natural gas revenue monthly following the closure of the gas plant since November 27, 2008 as a result of the activities of militants and vandals.
The gas plant accounts for 40 per cent of the gas need of the Nigerian Liquefied Natural Gas (NLNG) Plant in Bonny Island of Rivers State. NLNG supplies 10 per cent of the world’s liquefied natural gas. Following the closure of the plant, NLNG declared force majeure on 40 per cent of its LNG supplies to European customers.
The company said over 101 vandalised points were detected on the pipelines shortly before closure. When remediation was being carried out, Shell discovered that about 200 places on the 58 kilometres pipeline had been punctured for stealing of the product.
The plant was capable of producing 577 billion standard cubic feet of gas per day but the theft of condensate, which is a by-product of crude oil, has grossly affected production.

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NSIB, AAAU Sign MoU On Air Safety Training

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As part of efforts to curb mishaps in the aviation industry, the Nigerian Safety Investigation Bureau (NSIB) has signed a Memorandum of Understanding (MoU) with the African Aviation and Aerospace University (AAAU) to deepen training on preventing and reducing accidents in Nigeria’s air transport.
Director, Public Affairs and Consumer Protection of NBIS, Mrs Bimbo Olawumi Oladeji, in a statement, said NSIB granted AAAU access to its facilities to facilitate an efficient exchange of resources and expertise.
According to the statement, the Director-General/Chief Executive Officer of NSIB, Captain Alex Badeh, who spoke at the ceremony held at the NSIB Training School, noted that the MoU sets the stage for facility sharing, capacity building, and collaboration between the Bureau and AAAU.
“I am confident that this MoU will enhance the effectiveness of our collaboration and commitment to promoting safer skies and operational excellence in the aviation industry in Nigeria and beyond”, Badeh said.
Registrar of AAAU, represented by the Director of Physical Planning and Works, Engineer Masud Aliyu Yerima, was also quoted in the statement, saying, “The journey of AAAU’s establishment and progress would have faced considerable challenges without NSIB’s generous support”.
He commended Badeh for his exemplary leadership and steadfast dedication in propelling NSIB to greater heights, and affirmed AAAU’s readiness to engage in mutually beneficial endeavours with NSIB.
“This partnership marks a significant milestone in fostering a culture of safety and excellence within Nigeria’s aviation sector, and both NSIB and AAAU are poised to leverage this synergy for the benefit of the industry and the nation at large.
“The African Aviation and Aerospace University, AAAU, is the first Pan-African university dedicated to aviation, aerospace, and environmental science.
“Addressing two critical needs within the continent’s industry, AAAU tackles the research and development gap in Africa’s aviation and aerospace sector while simultaneously cultivating a skilled workforce to propel it forward”, the statement added.

By: Corlins Walter

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Naira Rebound, Air Peace’s Expansion Deepens International Route Competition 

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he commencement of flights operations on the London route by an indegenous Carrier, Air Peace Airline, and the recovery of the local currency have sparked fresh competition on international routes.
Air Peace, Nigeria’s outstanding indigenous airline, may face a prolonged market battle with many foreign airlines with decades of experience in the industry following its entrance on the Nigeria-London route.
Some of the industry’s experts say the airline required support from the government and a strategic approach to stay competitive.
Analysts have also stated that the strategic move has garnered high praise from stakeholders in the aviation sector, considering that Nigerians were paying exorbitant prices to travel from Nigeria to London, but that sustaining this momentum will require more than just offering low prices.
On March 31, 2024, the 11-year-old airline made a bold statement with its inaugural flight, using a Boeing 777 aircraft, offering a capacity of 274 seats and carrying 260 passengers from Lagos to London.
It sold its tickets for N1.2m, a price way lower than the rates offered by most foreign airline operators plying the same route.
Just two weeks after entering the market, Air Peace’s Chief Executive Officer, Allen Onyema, complained on Arise TV that foreign airlines were undercutting prices in an attempt to push Air Peace out of the market.
Onyema said, “We are aware that there are devilish conspiracies. All of a sudden, airlines are pricing below the cost. One airline is advertising $100  and the other $350. If you peel up your entire aircraft and carry people on the wings, it is not even enough to buy fuel.
“Why are they doing that? Their government is supporting them because Nigeria has been a cash cow for everybody. The idea is to take Air Peace out, and the moment they succeed in taking Air Peace out, Nigerians will pay 20 times over. It would happen, God forbid, if they were able to take Air Peace out”.
It was gathered that an economy ticket for a flight scheduled for April 29, 2024, from Lagos to London costs about N679,375 on Ethiopian Airlines, an operator with 75 years of experience.
Air Peace priced the same ticket at N1,090,750. The difference is that on Air Peace, it will be a 6-hour non-stop flight, while on Ethiopian Airlines, it will take 16 hours with one stopover.
Last Friday, Ethiopian Airlines reduced the price of its London ticket by 0.77 per cent to N1,628,660 from  N1,641,249 two weeks ago.
In the same period, Air France’s price dropped to N1,687,824, nearly halving from last month’s N2,482,138.
On March 4, 2024, Lufthansa offered the Lagos-London route for N1,966,165. Qatar Airways provided the same ticket for N2,016,824, and KLM priced it at N2,448,740.
This continuous decline in air ticket prices was also driven by the strengthening of the naira against the US dollar and the payments of airlines’ trapped funds by the Central Bank of Nigeria.
Minister of Aviation and Aerospace Development, Festus Keyamo, had confirmed that the Federal Government, through the CBN, had cleared all the trapped funds (foreign exchange backlogs) to the tune of about $160m.
Beyond the ongoing price war, the Air Peace Chairman had also lamented the challenges with ground handling and space allocation at the London Gatwick Airport, adding that no airline has faced such obstacles before.
He noted, “On the inaugural flight out of London, 24 hours before departure, the management of Gatwick Airport moved us to another checking area instead of the designated one.
“The area they provided had a malfunctioning carousel, forcing us to manually transport luggage 50 meters away, causing delays”.

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PH Airport Users Lament Down Turn In Flight Operations 

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Users and business operators at the Port Harcourt International Airport, Omagwa, have decried the downward trend in flight operations at the airport.
Some of the users and operators told The Tide that flight operations at the airport, rather than go upward, have steadily been irregular, and diminishing steadily.
A regular air passenger of the airport, Simeon Echeonwu, in a chat with The Tide, said many airlines, both domestic and international operators, that usually operate at the Port Harcourt airport, have stopped operations, whereas others that are still operating are no longer very stable as before.
Echeonwu noted that airlines such as Aero Contractors, United Nigeria, and Green Africa airlines, now operate about one flight, twice a week, unlike before that they flew every day on Lagos and Abuja to Port Harcourt.
Also speaking, former Chairman of the FAAN Accredited Car Hires Association, Clifford Wahunoro, lamented that the down turn in Operations has affected the business of car hires.
“If you have noticed, I have not been regular at the airport for some time now, because business is no longer flowing at the airport as before. I will not fold my hands and be sitting down doing nothing, so I have to look for other things, so I come when I think there will be something.
“You can see that between 12noon and 1pm, after that segment of flights, when you have few flights arrival, many people will close for the day, and when you wait till evening, flight like Dana may come very late at night, and sometimes, it will not arrive, and by that time, many people will not like to book for commercial vehicle”, he said.
Meanwhile, a travel agent, who wished to be anoyimous, decried the rate at which the airport is going down in terms of flights operations, noting that Port Harcourt airport ought to be competing with the other major airports like Lagos and Abuja.
He queried if such was a calculated attempt to bring the airport to its kneel in terms of flight operations, while other major airports have steady flow of flight operations both for domestic and international.
TheTide observed a continuous distortions in flight movement at the airport. Some of the airlines, like Max air, which many passengers patronize, have completely stopped operations, and no new airline has been added.
Apart from the Air Peace Airline that has maintained some level of stability in operations, other few operators have been involved in either steady rescheduling of flights, cancellation and regular delay, resulting in poor and unpredictable flight movement, which affects or determine other businesses in the airport.

By: Corlins Walter

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