Carriers now spend over ₦7m per flight as regulators scramble to stabilise prices, ease debt tensions, and prevent widespread disruption…..
Nigeria’s aviation sector is edging closer to a major disruption as skyrocketing jet fuel prices and supply pressures continue to strain airline operations. In a bid to contain the crisis, the Federal Government has urged fuel marketers to extend a 30-day credit facility to airline operators and adopt a direct sales model to cut costs.
The intervention follows a series of high-level meetings convened by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), building on earlier engagements led by the Minister of Aviation and Airspace Management in late April.
Key stakeholders including aviation regulators, airline operators, and fuel suppliers gathered to address the rapidly worsening situation. Among those involved were representatives from the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), and the Nigerian Civil Aviation Authority (NCAA).
At the heart of the discussions was the urgent need to rein in the spiralling cost of Jet A1 fuel, which has become the single biggest expense for airlines.
New price benchmarks proposed
According to deliberations, stakeholders agreed on a new indicative pricing range based on current global oil trends and domestic realities. The recommended band places aviation fuel between ₦1,760 and ₦1,988 per litre in Lagos, and ₦1,809 to ₦2,037 per litre in Abuja.
However, industry insiders warn that these figures may not hold for long. Prices remain highly volatile, driven by geopolitical tensions including the ongoing U.S.–Iran conflict which continues to push crude oil prices upward.
Fuel purchased outside the assessed pricing window could cost significantly more, reflecting the unstable global market and varying operational expenses across the supply chain.
Airlines under severe pressure
For Nigerian airlines, the impact has been immediate and severe.
Operators say the cost of fuelling a single domestic flight has surged beyond ₦7 million, more than triple what was required just months ago. One airline disclosed that its average fuelling cost rose from about ₦2.1 million in January to roughly ₦7.6 million by late April.
Despite the steep increase, airlines have struggled to pass the full burden onto passengers. Competitive pressures and economic realities have kept ticket prices relatively constrained, forcing operators to absorb mounting losses.
Industry players warn that this trend is unsustainable. Without urgent relief, airlines may be forced to cut capacity, reduce flight frequencies, or in extreme cases, suspend operations altogether.
Debt crisis and operational risks
Compounding the situation is a growing financial dispute between airlines and service providers.
Domestic carriers currently owe more than ₦9 billion to ground handling companies, which have issued a seven-day ultimatum threatening to withdraw services. If unresolved, the standoff could disrupt both domestic and international flights.
To address this, the Ministry of Aviation has been tasked with facilitating negotiations between airlines and fuel marketers, as well as other service providers, to resolve outstanding debts and restore stability.
Proposed reforms to ease the burden
Beyond credit support, regulators are considering several structural changes aimed at improving efficiency and reducing costs.
One key proposal involves limiting the number of airside fuel distributors to only those with proven infrastructure and operational capacity. The move is expected to streamline logistics and reduce excessive markups within the supply chain.
There is also a push to include Aviation Turbine Kerosene (Jet A1) in the Federal Government’s naira-for-crude initiative. This policy could reduce dependence on foreign exchange and help stabilise domestic fuel pricing over time.
Local refining, global pricing dilemma
Ironically, the crisis is unfolding despite increased domestic refining capacity.
Nigeria’s largest refinery is currently producing significant volumes of jet fuel, yet a large portion is exported to international markets where prices are more attractive. While this boosts revenue for producers, it leaves domestic airlines exposed to global pricing pressures.
Analysts note that even with local refining, fuel prices in a deregulated market will continue to track international benchmarks—limiting the immediate benefits for local consumers.
Uncertain outlook for the aviation sector
As the crisis deepens, industry stakeholders warn that the coming weeks will be critical.
While the Federal Government’s interventions may provide temporary relief, long-term stability will depend on broader reforms particularly around crude supply, pricing mechanisms, and distribution efficiency.
For now, airlines remain in survival mode, navigating a volatile market that threatens not just profitability, but the continuity of air travel across Nigeria.
