The presidential campaign organization Hayatu-Deen has called on the federal government to review the subsidy system as part of efforts to deal with rising aviation fuel prices.
Mohammed Hayatu-Deen, former managing director of the defunct FSB International Bank, is seeking the presidency on the platform of the Peoples Democratic Party (PDP).
On Friday, airlines under the umbrella of Air Operators of Nigeria (AON), announced plans to stop flight operations on the high cost of aviation fuel, also known as Jet A1.
In a press release published Sunday by Isa Galaudu, chief executive of the organization, the group said urgent interventions are needed to deal with the consequences of the planned halt to flight operations.
“The economy is fast approaching failure due to neglect and denial by policy makers at a time when industry-wide passenger revenue growth is increasing due to the risks and dangers of rail travel. airlines should make more money and reinvest in seat capacity,” the statement said.
“But this is not the case due to price distortions and the consequences of a dysfunctional subsidy regime. It’s not rocket science to know that kerosene accounts for 40% of airlines’ direct operating costs. Consequently, a 250% increase in the price of this input completely eroded the low margins of air operators.
“The Hayatu-Deen Presidential Campaign Organization hereby advises the government, as a matter of urgency, to embark on a two-pronged approach to mitigate the cataclysmic and systemic risk this development poses to an already fragile economy afflicted by huge power shortages.
“The first is the immediate need for a massive increase in supply through import intervention to bring down prices and stabilize the market. The other being a more fundamental and strategic move to address the structural imbalance of the This will involve accelerating the modernization of moribund refineries and accelerating the commissioning of private refining capacity.
“These, coupled with an effective review of the failing subsidy system, will drive prices down while simultaneously increasing production of refined products including jet fuel, diesel and PMS, bringing the industry into full balance and dynamic.
“The transport and energy sectors are very important for productivity, production and employment because of their close links.
“Nigerians are already feeling the brunt of excruciating economic and social problems, and they do not deserve to be subjected to unbearable additional stress.”