CHAMWE KAIRA
The current disruption affecting jet fuel supplies has highlighted concerns within the industry over Namibia’s reliance on a single-supplier model for petroleum products, with industry sources warning that the arrangement could expose the country to broader energy security risks when contamination or other supply chain disruptions occur.
According to industry sources, the latest jet fuel issue illustrates the vulnerability created when there is no diversified supplier structure capable of providing an alternative source of fuel in the event of a product contamination, logistical disruption or other supply chain risk.
The sources said the risk extends beyond jet fuel and could affect other petroleum products, including gasoline and diesel, if a similar contamination problem were to occur.
They argued that a diversified supply model, with alternative suppliers available, would provide greater flexibility to maintain fuel availability when problems arise with a particular shipment or supplier.
“The current jet fuel issue is a result of the single supplier model,” one industry source said, arguing that the absence of an alternative supplier leaves Namibia exposed when the primary supply chain experiences a disruption.
The industry concern is linked to the structure of petroleum imports into Namibia, where the economics of transporting jet fuel independently can make it commercially unattractive.
According to the sources, jet fuel is generally brought into the country alongside diesel and gasoline on the same vessel. Importing jet fuel on its own, without the other major petroleum products, could make the shipment uneconomic because of the cost structure associated with transporting the product.
This means that a sole-supplier arrangement covering diesel and gasoline can effectively extend to jet fuel, leaving Namibia dependent on the same supply chain for a broader range of petroleum products.
As a result, industry sources contend that Namibia is effectively captive to one supplier for its refined petroleum product requirements, including jet fuel.
The current contamination issue has therefore brought the potential consequences of the model into sharper focus, particularly because aviation fuel is critical to the functioning of the country’s air transport system.
Industry sources said the issue demonstrates why energy security cannot only be assessed in terms of whether the country has sufficient fuel stocks, but also in terms of whether there are alternative sources available when a disruption affects the primary supply chain.
They warned that a contamination event affecting a shipment could create wider supply pressures if there is no alternative supplier capable of stepping in quickly to provide replacement product.
The concern also applies to other potential disruptions, including shipping delays, logistical constraints and interruptions elsewhere along the supply chain.
The sources said a more diversified supplier model could help mitigate these risks by ensuring that Namibia has access to alternative sources of petroleum products when one supplier or supply route is affected.
The current jet fuel problem has consequently renewed industry questions about the resilience of Namibia’s fuel supply arrangements and whether the existing model provides sufficient safeguards against disruptions affecting the country’s energy security.
This week, The Namibia Airports Company (NAC) said it was closely monitoring Jet A-1 fuel supply challenges affecting the aviation sector at Hosea Kutako International Airport, with coordination efforts underway to minimise disruptions to airport operations and air connectivity.
In an earlier interview in April, the Aircraft Owners and Pilots Association of Namibia (AOPA Namibia) warned that Namibia’s aviation sector was exposed to fuel supply and pricing risks due to single-supplier concessions at airports.
AOPA Namibia chief executive officer Matt Totten Jr said airports operated by the Namibia Airports Company rely on one fuel provider at each facility.
He said this leaves airlines, charter operators and general aviation users exposed to supply disruptions and price pressure.
AOPA Namibia called on the ministry of works and transport, the Namibia Civil Aviation Authority and the Namibia Airports Company to open airport concessions to multiple service providers.
