The price of aviation fuel, commonly known as Jet A1, has experienced a significant decline since the removal of fuel subsidies.
The Live News reports that the price dropped to N650 in Lagos and N680 in Abuja from over N800 starting June 1st. Prices in Kano, Maiduguri, and Port Harcourt are slightly higher. Recent checks revealed that sellers in Lagos sold Jet A1 at N620, while Abuja sellers sold it at N660 and Kano sellers at N680.
“The price is crashing, and I think we can’t explain the trend, but I want to believe it is the forces of demand and supply that are at play,” said an operator. “This has been the development since last week when fuel subsidy was removed from Jet A1. It appears this is a spontaneous reaction to oil and gas market developments.”
Last year, the price of Jet A1 skyrocketed beyond operators’ expectations, reaching almost N1,000 per liter. Airlines find the subsequent reduction in price to be a relief.
Similarly, the price of cooking gas in Nigeria has witnessed a significant decrease.
The cost of a 12.5 kg cooking gas cylinder has dropped from around N14,000 to N6,950 in Lagos and approximately N8,000 in other states.
Yesterday’s checks in various locations revealed that the price of cooking gas ranged from around N700 to N800 per kg, in contrast to the over N1,000 price point observed just a few weeks ago.
When asked about the correlation between the decrease in cooking gas prices and jet fuel, energy expert Olusesan Okunade stated that it was solely due to demand and supply. He explained that the liberalization of the gas market, coupled with reduced funds in circulation, has led to a decrease in demand. Consequently, suppliers are selling the gas at minimal margins to avoid wastage.
Mr. Okunade said, “To the best of my knowledge, I have not heard anything being responsible for this. People just want to dispose of those things and sell at a minimal margin as against when we were buying it for N12,000 or N13,000. It has no correlation with fuel subsidy.”
Another economic analyst, Mr. Babatunde Adeniji, suggested that the supply of Jet A1 might be surpassing the demand. He added, “Sometimes the situation when these products are ordered is different from when they arrive. So many may receive the stock at the same time.”
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