Oil shortages in Nigeria troubles airlines

Oil shortages in Nigeria, No. 1 oil producer in Africa and 13th largest in the world, have resulted in delayed local and regional flights with airlines reducing the number of passengers and rescheduling or cancelling flights.

Nigeria has a daily output of 2.4 million barrels a day, but is experiencing a shortage of oil products including the specialized aviation fuel.

“We are operating our Accra-Lagos-Accra flights. Given the aviation fuel challenges in Nigeria, we have had to reduce the passenger numbers since we fill our fuel tanks in Accra before leaving,” an airline said.

Africa World Airlines, Arik Air, Dana Air and Aero Contractors operate scheduled flights between the two capitals.

Nigeria recently reported that outstanding debts, the currency crisis, and fuel subsidy disputes are some of the major reasons for the fuel crisis.

Despite being one of the world’s biggest oil producers, Nigeria imports most of its fuel and is currently facing a severe shortage, the report said.

Nigeria does not have enough oil refineries. Even if its four existing refineries run at full capacity, they can only supply a quarter of the country’s needs, said John Ashbourne, an economist at the financial research firm Capital Economics.

“To meet demands, the national oil company imports around 50 percent of its fuel needs,” BBC reported. “The remainder is then supposed to be imported by private fuel distributors. But for months these companies have been reducing their imports, leading to the current fuel shortages.”

The Accra-Lagos route is one of the most important and profitable in the sub-region, given the volume of trade between the two countries. It is key to the survival and growth of Ghanaian registered carriers, primarily because they are unable to break even on domestic destinations.