Nigeria’s aviation sector is facing fresh pressure as rising jet fuel costs threaten airline operations, prompting the Federal Government to introduce emergency measures to stabilise the market.
The government has directed fuel marketers to sell aviation fuel directly to airlines and provide a 30-day credit facility to ease financial strain on operators.
Stakeholders Push for Urgent Intervention
The decision followed high-level meetings coordinated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority after earlier consultations led by the Ministry of Aviation.
Key stakeholders at the meeting included the Federal Airports Authority of Nigeria, Nigerian Airspace Management Agency, Nigerian Civil Aviation Authority, airline operators, and fuel marketers.
Participants called for regulatory action to address pricing instability tied to global oil benchmarks, particularly Platts pricing components.
New Jet Fuel Price Benchmarks Introduced
Stakeholders agreed on a new indicative price range for aviation fuel based on current global market conditions:
• Lagos: ₦1,760 – ₦1,988 per litre
• Abuja: ₦1,809 – ₦2,037 per litre
However, prices may fluctuate due to volatility in global oil markets, especially amid geopolitical tensions such as the U.S.-Iran conflict.
Airlines Struggle with Rising Costs
Despite the benchmark, industry players say actual costs remain significantly higher when logistics and supply chain expenses are added.
Airlines report spending over ₦7 million to fuel a single domestic flight, with some operators paying as much as ₦7.6 million per trip.
One of Nigeria’s leading carriers, Ibom Air, disclosed that fuel costs have more than tripled in recent months, rising from about ₦2.1 million per flight earlier in the year.
The airline warned that the situation is unsustainable and may force capacity cuts or service disruptions if urgent solutions are not implemented.
Debt Crisis Deepens Sector Challenges
The aviation sector is also grappling with mounting debts, including over ₦9 billion owed by airlines to ground handling companies.
Members of the Aviation Ground Handlers Association of Nigeria have threatened to withdraw services, raising concerns over possible nationwide flight disruptions.
Dangote Refinery Profits Amid Crisis
While airlines struggle, the Dangote Petroleum Refinery is reportedly benefiting from strong global demand for jet fuel, exporting large volumes to Europe at premium prices.
The refinery produces about 24 million litres of jet fuel daily, with a significant share exported, even as domestic airlines face rising costs.
Calls for Long-Term Solutions
To address the crisis, stakeholders recommended:
• Inclusion of aviation fuel in the naira-for-crude initiative
• Reduction in the number of airside fuel distributors
• Improved access to local crude for domestic refining
• Pricing reforms to reflect local economic realities
Experts warn that while Nigeria’s deregulated fuel market allows price flexibility, it also exposes the aviation sector to global shocks.
Without sustained intervention, analysts say the rising cost of jet fuel could lead to higher airfares, reduced flight frequency, and broader disruptions across Nigeria’s aviation industry.
