Friday, April 8, 2011

Unknown

The High Cost of Getting High

Aviation Turbine kerosene; also know as ATK or Jet A1 is what aircrafts consume so copiously in other to get high. It used to be, in this country, and still is, in some other climes, a relatively cheap fuel. Perhaps this can be illustrated by recalling a story once told by the BBC’s Louise Greenwood, of the thriving but illegal brewing markets in some African countries. Ms. Greenwood had reported that about half of all the alcohol drunk in Sub-Saharan Africa is produced illegally, with Kenya (85%) and Tanzania (90%) topping the chart of illegal booze drinkers.

The booming cottage industry of clandestine breweries is mainly sustained by the fact that legal booze, on account of heavy taxation, is very expensive. Thus with the illicit alternatives selling for less than 20 US cents per glass, Africa’s poor, most of who earn less than a dollar per day, have no other way of “bottling out their troubles”. As the story goes, African moonshine, with names like "Kill me quick", "The dog that bites" and "Goodbye Mum", has a frightening reputation. Thousands of people have been killed, blinded or rendered sterile from drinking lethal concoctions, which in some cases had had their alcohol content bolstered with such odd things as embalming fluid and… (get ready for this)

AVIATION FUEL!!!

The underground brewers of Kenya and Tanzania must take the idea of getting high way too seriously.

Some cold comfort is however offered by the fact that nowhere in Ms. Greenwood’s story is a Nigerian numbered among those who adulterate “Kill me quick” and “The dog that bites” with Jet fuel. Had that been the case, a most unusual party would have joined Nigeria’s ever recurring aviation fuel price war. Yes, our local airliners would have had not just fuel marketers, but illicit booze brewers, to contend with as well.

Indeed Nigerian local airline operators and their fuel suppliers make a most quarrelsome and controversy loving couple. The rest of us Nigerians who commute on domestic routes; and even those who use Household Kerosene (ATK’s twin sister) for cooking and lighting are the traumatised off springs of this union. In the last one year, there have been, apart from the present one, two major fights and perennial squabbles between these two. In January 2009 the fuel marketers (as they have done again this time around) hiked the price of jet fuel from around N80 to as much as N160/litre in some parts of the country. The airlines, who claim that fuelling alone gulps as much as 50% of their operational costs, cried blue murder. They made it clear to everyone that there was no way they could meet their financial obligations with such pricing in place. It took the intervention of the Nigerian House of Representatives committee on aviation to resolve the matter. A meeting of all stakeholders was called and in less than 2days, prices went back down to N80. Not a few people wondered if there was cogent justification for the hick in the first place.

August 2009 was yet another occasion for conflict. In fairness to all concerned, those were indeed very demanding times. A certain Lamido Sanusi, who had just taken over the reigns of leadership at the Central Bank of Nigeria (CBN), was carrying out systemic environmental sanitation. Some of his actions ensured that credit facilities, particularly those to fuel marketers, became pipe dreams. So with no loans coming from their bankers, the fuel marketers again took it out on the airlines. They replicated the general attitude of banks at that time, and thus jet fuel became cash and carry commodity. Tales of how airlines would collect fares and check in passengers before placing cash backed fuel orders right on the tarmac may sound amusing now, but they weren’t so back then.

by Victor Onyegbado
Mr. Victor is the Editor of OTL Downstream Newsletter (a free Newsletter for Oil trading and logistics)
To subscribe for the newsletter please go to www.otlafrica.com

Unknown

About Unknown -

Author Description here.. Nulla sagittis convallis. Curabitur consequat. Quisque metus enim, venenatis fermentum, mollis in, porta et, nibh. Duis vulputate elit in elit. Mauris dictum libero id justo.

Subscribe to this Blog via Email :