The federal government has urged fuel marketers to offer airline operators a 30-day credit window and sell aviation fuel directly to carriers, in a bid to ease a deepening jet fuel crisis that is pushing the country’s aviation sector towards disruption.
The intervention follows a series of high-level meetings convened by the Nigerian Midstream and Downstream Petroleum Regulatory Authority after an earlier session led by the aviation minister on 22–23 April. Officials from the ministries of aviation and petroleum resources met with regulators, airlines and fuel suppliers in Abuja to chart an emergency response to spiralling costs.
At the centre of the discussions was the relentless rise in the price of Jet A1 fuel, driven by global oil volatility and domestic supply bottlenecks. Stakeholders called for regulatory action to stabilise pricing, including a review of components tied to international benchmarks such as Platts.
An executive summary of the meeting proposed an indicative price band of N1,760 to N1,988 per litre in Lagos and N1,809 to N2,037 in Abuja, based on average Platts data between 17 and 23 April. But officials warned that prices could quickly overshoot those levels, citing volatility linked to the ongoing U.S.–Iran conflict and rising operational costs.
To streamline supply, regulators were also asked to reduce the number of airside fuel distributors, limiting access to operators with verifiable infrastructure and capacity. The move is intended to curb inefficiencies and tighten oversight across the supply chain.
Mounting debt between airlines and fuel marketers remains another fault line. The aviation ministry has been tasked with brokering talks to resolve outstanding obligations, while marketers are being encouraged to adopt more flexible payment terms — including the proposed 30-day credit facility — to ease airlines’ cashflow pressures.
There were also calls to include aviation fuel in the government’s naira-for-crude scheme, designed to reduce foreign exchange exposure and moderate domestic fuel prices.
Yet the scale of the crisis facing airlines is stark. Carriers say they now spend upwards of N7m to fuel a single domestic flight, with costs more than tripling in recent months. Ibom Air said its per-flight fuel bill has jumped from about N2.1m in January to roughly N7.6m by late April — a surge it described as “unprecedented”.
Despite the spike, airlines say competitive pressures and weak consumer demand have limited their ability to raise fares, forcing them to absorb losses. Some warn they may be left with little choice but to cut capacity or ground aircraft if conditions persist.
The strain is industry-wide. Airline Operators of Nigeria estimates that, once logistics and storage costs are added, the effective price of Jet A1 has climbed to around N3,300 per litre — nearly three times February levels.
Compounding the pressure is a separate standoff with ground handling firms over more than N9bn in unpaid fees. Members of the Aviation Ground Handlers Association of Nigeria have threatened to withdraw services, raising the spectre of widespread flight disruptions.
Meanwhile, the crisis has cast a spotlight on the Dangote Petroleum Refinery, which is profiting from strong global demand for jet fuel. The $20bn facility — Africa’s largest, with capacity of 650,000 barrels per day — is exporting significant volumes to Europe, where margins are high ahead of the summer travel season.
Industry data suggests the refinery is producing about 24m litres of jet fuel daily, with much of it shipped abroad, even as domestic airlines struggle with rising costs. Executives say the plant still meets most local demand, estimated at just over 2m litres per day, but analysts argue that supply chain costs and global pricing dynamics continue to inflate prices at home.
The disconnect underscores a broader tension in Nigeria’s deregulated fuel market: while refining capacity has expanded, domestic prices remain exposed to international swings. As one analyst put it, building a mega refinery does not guarantee cheaper fuel in a market driven by global benchmarks.
For now, the government’s proposed measures — from direct sales to credit support — offer temporary relief. But industry players say lasting stability will depend on deeper reforms, including improved crude supply to local refineries and a more efficient distribution system.
Until then, Nigeria’s aviation sector remains caught between global opportunity and domestic strain, with the risk that rising fuel costs could soon ground more than just balance sheets.
