The Federal Competition and Consumer Protection Commission (FCCPC) stated that every airline should fix its fares in accordance with its own revenue model, as there won’t be a mutual understanding of the increase in air fares.
This was disclosed by FCCPC’s Chief Executive Officer, Babatunde Irukera, in an interview with Arise TV on Tuesday, while providing an update on the Jet fuel crises which nearly caused a strike last Monday.
Nigeria’s aviation industry has been rocked by jet fuel price protests by airlines, which has seen the House of Reps intervened asking the NNPC to sell aviation fuel to marketers at N480 per litre untill August.
What the FCCPC boss said:
On the proposed increasing of fares by airlines to deal with the increased costs of doing business, Irukera stated that “One of the dilemmas airlines expressed is that as a regulator, the FCCPC does not have a problem with them increasing yet, as they are unable to stop costs of jet fuel.
“Every airline should price its services in accordance with its own revenue, model, there is going to be no mutual understanding of increase in air fares, any such discussion will be against the law.”
He also recalled that with respect to aviation fuel, if airlines want to get together to address the supply issues from same source at same price, even though typically this are input costs that should be indecently and fiercely competed, “We should understand that and relax the rules with competition in supply chain.”
He added that the FCCPC is also looking at members of MOMAN who sell jet fuel, to see if there is any profiteering or taking advantage of what is the unfortunate situation of taking advantage of a war ( Russian invasion of Ukraine), to unjustly increase what has been acceptable margins..
What you should know
- Recall Nairametrics reported that Nigeria’s Central Bank Governor, Godwin Emefiele disclosed that the rising crude oil theft in the Niger Delta region has made it difficult to grant foreign exchange to aviation operators.
- He added that the CBN had no foreign exchange for airline operators and that since the landing cost of aviation fuel was N460 per litre, the price would come to N550 per litre at the pump, stating that the Bank would not grant any concession because it would amount to giving subsidy to aviation operators.
- “I compelled some fuel marketers to take the loss and to sell aviation fuel at N480 per litre after getting a call from the Chief of Staff to the President that the operators were planning a strike and I promised to intervene,’’ Emefiele said.
- Femi Gbajabiamila, speaker of the House of Representatives, told newsmen that the Nigerian National Petroleum Company has agreed to supply the product to marketing firms nominated by the airlines at N40/ liter until August.
- In March, The Federal Competition and Consumer Protection Commission (FCCPC) had ordered domestic airline operators to immediately discontinue the current implementation of airfare increases pending the outcome of its investigation.