- Dangote Refinery reduced the ex-depot price of aviation fuel to N1,650 per litre, but retail prices remain close to N2,000 per litre across major cities
- Airlines and operators say the high cost of Jet A1 is still affecting flight operations, forcing some carriers to reduce flight frequencies
- Industry experts blame the continued high prices on logistics costs, old fuel stock, foreign exchange challenges, taxes, and global fuel supply disruptions
Legit.ng journalist Victor Enengedi has over a decade’s experience covering energy, MSMEs, technology, banking and the economy.
Despite a recent reduction in the ex-depot price of aviation fuel by the Dangote Refinery and Petrochemicals, airlines and operators are still paying significantly high prices for Jet A1 across the country.
Checks by Daily Trust showed that aviation fuel is currently selling for between N1,900 and N2,000 per litre in major cities, even after the refinery announced a cut in its gantry price from N1,750 to N1,650 per litre.
Source: UGC
The development has raised concerns among airline operators and industry stakeholders who expected the reduction to ease operational costs and eventually lower airfares.
Airlines yet to feel relief from Dangote price cut
The refinery had announced the price adjustment as part of efforts to support airlines struggling with rising operating expenses and unstable fuel supply. The move also came with a 30-day interest-free credit arrangement for marketers and airline operators, backed by bank guarantees.
In addition, the company shifted from a dollar-based pricing model to naira-denominated transactions, a step expected to reduce pressure from exchange rate fluctuations.
However, market surveys indicate that the changes have not been reflected at the retail level. In Abuja and Kano, Jet A1 is still being sold at about N2,000 per litre, while prices in Lagos range between N1,910 and N1,925 per litre.
One fuel marketer also reportedly informed an airline customer of another upward review in prices, citing persistent volatility in petroleum product costs, rising ex-depot prices, and increasing logistics expenses.
According to the marketer, the adjustment was necessary to sustain supply operations and maintain service delivery standards.
Airlines struggle amid rising fuel costs
Nigeria’s aviation sector has continued to battle soaring fuel costs, which remain one of the industry’s biggest challenges. Earlier this year, some domestic airlines reduced flight frequencies as fuel prices climbed beyond N2,500 per litre.
The Airline Operators of Nigeria had previously threatened to suspend operations over the crisis before government intervention led to discussions with fuel marketers and other stakeholders.
Although those meetings prevented a shutdown, operators say little progress has been made, with many airlines still cutting flights to manage expenses.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority had earlier fixed aviation fuel prices at N2,037 per litre in Abuja, while Lagos was placed within a price band of N1,760 to N1,988 per litre to stabilise the market.
Why jet fuel prices remain high
Industry experts say several factors are preventing the refinery’s reduction from translating into lower retail prices.
According to analysts, marketers are still dealing with old fuel stock bought at higher prices before the latest adjustment. They also pointed to transportation expenses, foreign exchange instability, taxes, storage charges, and aviation-specific regulatory fees as key contributors to the high retail cost.
Fuel marketers handling Jet A1 also pay additional charges to aviation agencies such as the Nigerian Civil Aviation Authority and the Federal Airports Authority of Nigeria, costs which are eventually passed on to airlines.
Source: UGC
Global developments have also worsened the situation. The ongoing tensions involving the United States, Israel, and Iran, alongside disruptions around the Strait of Hormuz — a major global oil shipping route — have continued to affect international fuel supply and pricing.
Analysts warn that unless costs ease soon, airlines may be forced to further reduce routes, cancel flights, or increase ticket prices for passengers.
Senate unhappy with rising airfares
Meanwhile, Legit.ng earlier reported that the Senate invited the Minister of Aviation and Aerospace Development, Festus Keyamo, alongside key aviation agencies and airline operators, to an emergency meeting over the sharp rise in domestic airfares.
The lawmakers said the current pricing trends were “unacceptable” and risked putting air travel out of the reach of many Nigerians.
According to the Senate, fares on routes such as Abuja–Lagos, Abuja–Enugu and Abuja–Ilorin have climbed to between N400,000 and N650,000.
Source: Legit.ng