Marketers accused of raking in profits selling aviation fuel as kerosene

01 August 2016, Lagos – As the price of kerosene continues to soar because of inadequate supply, marketers have been accused of selling Jet A1, better known as aviation fuel, as kerosene, in the process making a kill of N50-N100 per litre.
The diversion of the product to fuel outlets where it is sold as household kerosene has also been blamed for the scarcity of Jet A1 and several flight cancellations and delays in the aviation sector in the last one month, THISDAY has learnt.
Aviation-Fuel-Jet A1Kerosene and jet fuel are nearly identical in every way except for a few additives in modern jet fuel, with industry experts describing the latter as nothing other than cleaner kerosene with no sulphur content.
However, the scarcity of foreign exchange in the country has made it very difficult for oil marketers to import and supply petroleum products that would sufficiently meet the needs of consumers.
As such, several marketers have started diverting Jet A1 to fuel outlets where it is sold as kerosene at a higher price than aviation fuel.
Aviation fuel sells for between N198 and N200 in Lagos while kerosene goes for N200 to N300 per litre.
THISDAY investigations revealed that marketers now prefer to sell Jet A1 as kerosene after degrading it and that explains the scarcity of aviation fuel in the past one month, leading to flight cancellations and delays.
Informed sources confirmed that aviation fuel is highly refined kerosene with zero sulphur, which when used for cooking leaves the pot without soot.
But instead of importing kerosene, oil marketers import aviation fuel because almost all modern refineries in the world no longer refine kerosene owing to the low demand for the product as a heating oil in several countries.
However, Nigeria’s refineries, which were built between the 1960s and 1980s still produce kerosene and unlike refining plants in other parts of the world, the Nigerian plants have not been upgraded to refine only diesel, petrol and Jet A1.
A seasoned aeronautical engineer and pilot, who operates a non-scheduled flight out of Lagos, told THISDAY at the weekend that the current scarcity of aviation fuel would persist until marketers and the Nigerian National Petroleum Corporation (NNPC) begin to import sufficient kerosene to meet consumers’ demands.
The source told THISDAY that every jet engine can use kerosene, but Jet A1 is of higher quality because it has no sulphur.
“Nigerian airlines will not have adequate supply of Jet A1 as long as kerosene is scarce and sells at higher price than aviation fuel. So the solution to the current scarcity is for NNPC to import massive volumes of kerosene, which is a product required by ordinary Nigerians.
“For us in the industry, we have always known that very few refineries in the world still refine kerosene, excluding Nigeria refineries, and besides higher quality refining, there is really not much different between Jet A1 and kerosene because jet engines can use kerosene.
“The marketers make almost N50 per litre in every litre of aviation fuel sold as kerosene and everyone wants to make as much profit as possible these days when things are very tough.
“People are looking for ways to make money and there is nothing wrong in this, except that the desire to make more profit by the marketers is threatening air transport in Nigeria.
“When we keep Jet A1 for a long time of up to six months, we cannot use it to operate our aircraft again, so we give it out and it is sold as kerosene,” the source said.
The allegation was confirmed by the Chairman of the Petroleum Downstream Group of the Lagos Chambers of Commerce and Industry, Mr. Ken Abazie, who said that the issue of scarcity of aviation fuel could not be taken in isolation, noting that the increasing inability of a lot of importers to open Letters of Credit (LC) due to inadequate availability of FX was the greatest challenge in the importation of petroleum products today, including aviation fuel.
“It has also been reported that because kerosene is currently in short supply in the country, it is being sold at a premium price by importers, and so it is also speculated that some importers of Jet A1 downgrade the product and sell it as Dual Purpose Kerosene (DPK).
“So the combination of these two factors in recent months have led to the scarcity of aviation fuel with all the attendant hardship on airlines and air travellers in the country,” Abazie said.
– This Day
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