Despite the fact that oil marketers are yet to reduce the price of aviation fuel, otherwise known as JET A1, airline operators said that a drop in the price of the commodity would make no impact on their operations because of the devaluation of naira.
One dollar now exchanges for N168 at the official market but trades at N208 at Bureau de Change (BCDs). The Central Bank of Nigeria (CBN), which devalued the naira by eight per cent last October, has been trying to narrow the gap at which the currency, hard hit by the drop in oil prices, trades on the interbank market through its regular interventions and is also trying to curb speculation.
Over the last year, the banking watchdog has burned through 20 per cent of its reserves, spending $28 million a day to defend the currency, which has been under unrelenting pressure from a lack of petro-dollars. By end-January, reserves stood at $34.28 billion While the Federal Government announced a cut of N10 in the price of Premium Motor Spirit (PMS), aviation fuel still sells for between N98 and N105 per litre, raising hopes that the price of the commodity might drop following the sharp decline in the price of oil.
The global airline industry is expected to report a near $5 billion increase in profits this year to $25 billion, benefiting from cheaper fuel after crude oil prices slumped 60 percent since June last year. Now that the price of crude oil has sunk to a six-year low, petrol is much cheaper, but airfares and some home energy bills still seem head-scathingly high.
The cost of jet fuel, for example, has fallen a whopping 43 per cent on average worldwide from the price a year ago. On January 7, as North Sea oil prices hit a five-year low of $53 a barrel, British Finance Minister, George Osborne, tweeted: “Vital this is passed on to families at petrol pumps, through utility bills and air fares.”
In Nigeria, local and international fares remain unchanged, although the cost of aviation fuel has not gone down.
Source:newtelegraphonline.com
No comments:
Post a Comment