The Federal Government of Nigeria has officially addressed speculations surrounding the proposed introduction of a 5% fuel surcharge on domestic airfares, clarifying that there are no immediate plans to implement such a policy. This statement comes in response to a recent directive from the Nigerian Civil Aviation Authority (NCAA), which had sparked widespread discussions and concerns among stakeholders in the aviation sector, including airline operators, passengers, and industry analysts. The clarification, issued through a statement by the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, seeks to dispel rumors and provide a clearer understanding of the government’s position on the matter.
Background of the Fuel Surcharge Proposal
The Nigerian aviation sector has been grappling with numerous challenges in recent years, with rising operational costs being one of the most significant hurdles for domestic airlines. The cost of aviation fuel, commonly referred to as Jet A1, has skyrocketed due to global oil price volatility, foreign exchange constraints, and logistical challenges in the supply chain. These factors have placed immense financial pressure on airlines, many of which operate on thin profit margins. To address this issue, discussions about introducing a fuel surcharge—a percentage-based fee added to airfares to offset the rising cost of fuel—have surfaced periodically.
The idea of a fuel surcharge is not new in the global aviation industry. Many airlines worldwide have implemented similar measures during periods of high fuel prices to cushion the financial burden on their operations. In Nigeria, however, the proposal has been met with mixed reactions, primarily due to the already high cost of air travel and the economic realities faced by passengers, many of whom are dealing with inflation and reduced purchasing power.
The recent directive from the NCAA, which was misinterpreted by some as an approval for airlines to immediately impose a 5% fuel surcharge, triggered a wave of public concern. The directive, issued in late 2025, was intended to provide a framework for airlines to apply for approval to introduce a surcharge, subject to regulatory oversight. However, the lack of clarity in the initial communication led to confusion, with some stakeholders assuming that the policy was already in effect.
Government’s Clarification
In a detailed press statement released on September 8, 2025, the Federal Government, through the Ministry of Aviation and Aerospace Development, addressed the controversy. The statement emphasized that no final decision has been made to implement a 5% fuel surcharge on domestic airfares. Instead, the government is still consulting with stakeholders, including airline operators, consumer protection groups, and regulatory bodies, to determine the feasibility and potential impact of such a policy.
The Minister of Aviation, Festus Keyamo, noted that the NCAA’s directive was part of ongoing efforts to find sustainable solutions to the challenges facing the aviation sector. He explained that the directive was meant to open a dialogue with airlines, allowing them to submit proposals for a fuel surcharge if they deemed it necessary to sustain their operations. However, any such proposal would undergo a rigorous review process to ensure it aligns with the interests of both the airlines and the traveling public.
“The Federal Government is fully aware of the economic challenges faced by Nigerians, and we are committed to ensuring that any policy decision in the aviation sector takes into account the welfare of passengers,” Keyamo said. “There is no immediate plan to impose a 5% fuel surcharge. What we have is a framework that allows airlines to make proposals, which will be thoroughly evaluated by the NCAA before any approval is granted.”
The Minister further clarified that the government’s priority is to strike a balance between supporting the financial sustainability of domestic airlines and protecting consumers from excessive fare hikes. He acknowledged the critical role that aviation plays in Nigeria’s economy, particularly in facilitating business travel, tourism, and connectivity across the country’s vast regions. However, he stressed that any policy that could increase the cost of air travel must be carefully considered to avoid placing additional burdens on passengers.
Stakeholders’ Reactions
The clarification from the Federal Government has elicited varied responses from stakeholders in the aviation sector. Airline operators, represented by the Airline Operators of Nigeria (AON), welcomed the government’s openness to dialogue but expressed concerns about the sustainability of their operations without immediate relief measures. The AON has been vocal about the rising cost of aviation fuel, which accounts for a significant portion of airlines’ operating expenses. According to industry estimates, fuel costs can constitute up to 40% of an airline’s total operational costs in Nigeria, a figure that has risen sharply in recent years due to fluctuations in global oil prices and the depreciation of the naira.
The AON’s President, Alhaji Abdulmunaf Yunusa Sarina, argued that a fuel surcharge, if carefully implemented, could provide a lifeline for airlines struggling to stay afloat. “The cost of Jet A1 has become unsustainable for many of our members,” Sarina stated. “Without some form of intervention, we risk seeing more airlines fold, which would have devastating consequences for the industry and the economy at large.” He urged the government to expedite consultations and consider temporary measures, such as subsidies or tax waivers on aviation fuel, to alleviate the financial strain on airlines.
On the other hand, consumer advocacy groups and passengers have expressed relief at the government’s clarification but remain wary of any future moves to introduce a fuel surcharge. The Consumer Protection Network, a prominent advocacy group, cautioned against policies that could further inflate airfares, which are already among the highest in the region. The group’s spokesperson, Mrs. Adetola Adebayo, highlighted the need for transparency in the consultation process and called for measures to address inefficiencies in the aviation fuel supply chain, which she argued contribute significantly to high costs.
Passengers, many of whom rely on air travel for business and personal reasons, have also voiced their concerns. Mr. Chukwuma Okeke, a frequent flyer based in Lagos, described the proposed surcharge as “another blow to the average Nigerian.” He pointed out that airfares have already risen significantly in recent years, making air travel unaffordable for many. “If the government allows airlines to add a fuel surcharge, they must also ensure that fuel prices are stabilized and that airlines are not exploiting passengers,” Okeke said.
The Broader Context: Challenges in the Nigerian Aviation Sector
The debate over the fuel surcharge is just one facet of the broader challenges facing Nigeria’s aviation industry. The sector has been plagued by a combination of economic, infrastructural, and regulatory issues that have hindered its growth and competitiveness. Key among these challenges is the high cost of aviation fuel, which is often imported due to limited domestic refining capacity. The reliance on imported Jet A1 exposes airlines to foreign exchange risks, as the naira’s depreciation against the dollar drives up costs.
In addition to fuel costs, airlines face other operational challenges, including high maintenance costs, limited access to spare parts, and inadequate airport infrastructure. Many of Nigeria’s airports lack modern facilities, leading to delays, cancellations, and inefficiencies that further strain airlines’ finances. The regulatory environment, while improving in recent years, has also been criticized for inconsistent policies and bureaucratic delays, which can hamper airlines’ ability to operate efficiently.
The Federal Government has taken steps to address some of these issues, including investments in airport infrastructure and efforts to improve the supply chain for aviation fuel. However, progress has been slow, and the industry continues to face significant headwinds. The proposed fuel surcharge, while controversial, is seen by some as a stopgap measure to keep airlines operational while longer-term solutions are developed.
Global Comparisons: Fuel Surcharges in Other Markets
To provide context, it is worth examining how other countries have handled fuel surcharges in their aviation sectors. In markets such as the United States, Europe, and Asia, fuel surcharges have been a common tool used by airlines to manage fluctuations in fuel prices. These surcharges are typically introduced during periods of high oil prices and are adjusted or removed when prices stabilize. Regulatory bodies in these markets often require airlines to clearly disclose surcharges to passengers, ensuring transparency and accountability.
In Nigeria, however, the introduction of a fuel surcharge is complicated by the country’s economic realities. With inflation rates hovering around 25% and a significant portion of the population living below the poverty line, any increase in airfares is likely to face strong resistance. Moreover, the lack of a robust low-cost carrier model in Nigeria means that passengers have limited options for affordable air travel, making fare increases particularly burdensome.
The Way Forward: Balancing Interests
The Federal Government’s clarification that there are no immediate plans for a 5% fuel surcharge provides temporary relief for passengers but does not resolve the underlying issues facing the aviation sector. Moving forward, stakeholders must work collaboratively to find sustainable solutions that address the financial challenges faced by airlines while protecting consumers from excessive costs.
One potential approach is to explore alternative measures to reduce airlines’ operating costs. For example, the government could prioritize investments in domestic refining capacity to reduce reliance on imported aviation fuel. The Dangote Refinery, which began operations in 2023, has the potential to supply Jet A1 at competitive prices, provided logistical and regulatory bottlenecks are addressed. Additionally, tax incentives or subsidies for airlines could provide short-term relief while longer-term solutions are implemented.
Another critical area of focus is improving transparency and efficiency in the aviation fuel supply chain. Stakeholders have long complained about opaque pricing mechanisms and inefficiencies in the distribution of Jet A1, which contribute to high costs. Addressing these issues could help stabilize fuel prices and reduce the need for surcharges.
On the regulatory front, the NCAA must ensure that any future proposals for fuel surcharges are subject to rigorous scrutiny. This includes requiring airlines to provide detailed justifications for the surcharge, as well as mechanisms to ensure that passengers are not unfairly burdened. Consumer engagement will also be critical to building trust and ensuring that policies reflect the needs of all stakeholders.
Conclusion
The Federal Government’s clarification that there are no immediate plans to implement a 5% fuel surcharge on domestic airfares has put to rest, at least temporarily, concerns about rising travel costs. However, the issue underscores the broader challenges facing Nigeria’s aviation sector, from high fuel costs to infrastructural deficiencies. As the government continues to consult with stakeholders, it must prioritize solutions that balance the financial sustainability of airlines with the affordability of air travel for passengers.
The aviation sector remains a critical component of Nigeria’s economy, facilitating connectivity and economic activity across the country. Ensuring its viability will require bold and innovative policies, as well as collaboration between the government, airlines, and consumers. For now, the absence of an immediate surcharge offers a reprieve, but the conversation about how to address the sector’s challenges is far from over.
