In response to Nigeria’s deepening jet fuel shortage and soaring prices, the Federal Government has directed fuel marketers to provide airline operators with a 30-day credit facility and to supply aviation fuel directly to them.
This decision follows high-level meetings organized by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), after an earlier session convened by the Minister of Aviation and Airspace Management on April 22-23, 2026. The meetings brought together officials from the Ministries of Aviation and Petroleum Resources, key aviation agencies—including the Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA), Nigerian Civil Aviation Authority (NCAA)—as well as airline operators and fuel marketers.
An executive summary obtained in Abuja on Monday revealed that stakeholders called for urgent regulatory action to stabilize jet fuel prices. They urged NMDPRA to engage with relevant bodies to review price components linked to international benchmarks.
To ensure price stability, NMDPRA should engage DPRP to adjust the premium on Platts and the cost variation element recently increased by the refinery, the document stated.
After deliberations, stakeholders agreed on a new indicative pricing band tied to global oil market trends and domestic costs. The recommended end-user price for aviation fuel was set at between N1,760 and N1,988 per litre in Lagos, and N1,809 to N2,037 per litre in Abuja, based on Platts average prices from April 17 to 23, 2026. The document cautioned that prices could rise further due to global volatility, particularly from the ongoing U.S.-Iran conflict and operational cost variances.
Products purchased outside this window may be higher due to high volatility in current prices precipitated by the U.S.-Iran war and varying operational costs by operators, the summary noted.
The committee also advised regulators to streamline airport operations by limiting airside fuel distributors to those with verified capacity and infrastructure. NMDPRA is to work with FAAN and NCAA to validate airside distributors with infrastructure to trim the number of operators based on agreed criteria, it stated.
Addressing the mounting debts between airlines and fuel marketers, the Ministry of Aviation was tasked with facilitating a consultative meeting to resolve outstanding payments. Marketers were encouraged to offer airlines more flexible payment terms, specifically a 30-day credit window for fuel supplies.
Additionally, the committee recommended including Aviation Turbine Kerosene under the Federal Government’s naira-for-crude initiative to reduce foreign exchange dependence and help stabilize fuel prices.
Industry Crisis
Nigeria’s aviation sector continues to grapple with inconsistent and high Jet A1 fuel costs, putting significant financial strain on airlines. Over the past two years, domestic carriers have repeatedly raised alarms as fuel prices at times exceeded N1,000 per litre, forcing fare hikes and, in some cases, reduced operations.
The latest pricing projections highlight the sector’s ongoing vulnerability to global oil market fluctuations, especially amid geopolitical instability such as the U.S.-Iran conflict.
Industry stakeholders emphasize that successful implementation of new measures—direct sales, price adjustments, and inclusion in the naira-for-crude policy—will be crucial to stabilizing aviation fuel supply, controlling costs, and sustaining airline operations nationwide.
Meanwhile, debt in the aviation sector has surpassed N9 billion, with ground handling companies threatening to suspend services if unpaid, potentially disrupting both domestic and international flights. The Aviation Ground Handlers Association of Nigeria, representing companies such as Skyway Handling Company of Nigeria Plc and Nigerian Aviation Handling Company Plc, has issued a seven-day ultimatum, intensifying concerns about widespread flight cancellations.
Rising Fuel Costs and Airline Warnings
Nigerian airlines now spend over N7 million to fuel a single domestic flight, raising doubts about the sustainability of their operations. Carriers told The PUNCH that operating costs have soared, with some warning of imminent service reductions if the trend continues.
Ibom Air reports spending N7.6 million per flight—more than three times its January costs. From an average of N2.1 million per flight in January, as of April 27th, we are paying approximately N7.6 million to fuel every flight. This is a more than 350 percent increase since the beginning of March, the airline said.
Despite these rising costs, airlines have been unable to raise fares significantly due to competitive pressures and broader economic realities. “We have had to absorb immense operating losses, believing the crisis would be short-lived, but it has now persisted for nearly two months,” Ibom Air said, warning that continued escalation could threaten the survival of domestic airlines.
United Nigeria Airlines spokesperson Chibuike Uloka confirmed that all operators are experiencing similar pressures, noting that larger aircraft such as the Airbus A320 consume even more fuel.
Dangote Refinery’s Profits Surge Amid Domestic Strain
While Nigerian airlines struggle, the $20 billion Dangote Petroleum Refinery is enjoying record profit margins from jet fuel exports, according to a recent Reuters report. The refinery, Africa’s largest, benefits from strong international demand and premium pricing in Europe, exporting much of its 24 million litres of daily jet fuel production while supplying only about 2.1 million litres to the domestic market.
Despite its capacity to meet local demand, the refinery relies heavily on imported crude from the U.S., Brazil, and other countries, which adds freight costs and limits profit potential. This is partly due to the Nigerian National Petroleum Company Limited’s crude-for-loan agreements, which tie up a large portion of the country’s oil output.
Industry analysts point out that while Dangote’s refining margins are significantly higher than those of European competitors, the benefits of a mega refinery do not automatically mean lower domestic fuel prices, especially in a deregulated market aligned with global benchmarks.
Government intervention has provided temporary relief, but stakeholders insist that a long-term solution requires improved crude supply to local refineries and greater efficiency in downstream distribution. They also caution that, absent structural reforms, domestic fuel prices will continue to reflect international market realities.
Dangote Group is planning a public listing and an expansion to boost refining capacity to 1.4 million barrels per day, potentially making it the world’s largest refinery by decade’s end. However, the current situation illustrates the stark divide between the refinery’s global profitability and the domestic challenges facing Nigeria’s aviation sector.
