The Federal Government has directed petroleum marketers to grant domestic airline operators a 30-day credit facility for the purchase of Jet A1 fuel, in a move aimed at preventing a looming collapse in Nigeria’s aviation sector.
The directive follows a series of high-level stakeholder meetings convened by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in collaboration with the Federal Ministry of Aviation and Aerospace Development. The intervention is designed to provide immediate financial relief to airlines grappling with rising operational costs, particularly the sharp increase in aviation fuel prices.
Officials involved in the discussions warned that the current pricing structure is influenced by global benchmarks, including the Platts average recorded in mid-April, and remains vulnerable to further fluctuations due to international tensions, notably the ongoing U.S.-Iran conflict.
As part of the resolutions reached, marketers have been encouraged to sell fuel directly to airlines, eliminating intermediaries that contribute to price inflation. The NMDPRA has also been tasked, alongside the Federal Airports Authority of Nigeria, with auditing airside fuel distributors to ensure that only operators with verifiable infrastructure and capacity remain active within the system.
In addition, the committee recommended the inclusion of Aviation Turbine Kerosene (ATK) in the Federal Government’s naira-for-crude initiative, a policy expected to reduce pressure on foreign exchange and stabilise fuel pricing within the domestic market.
The measures come amid growing concerns over the sustainability of airline operations in Nigeria. Industry data indicate that fuel costs have surged dramatically in recent months, placing immense strain on carriers.
One domestic airline, Ibom Air, disclosed that the cost of fuelling a single flight rose from approximately N2.1 million in January to about N7.6 million in April, representing an increase of over 350 percent. Operators of larger aircraft, such as the Boeing 737 and Airbus A320, reported even higher fuel expenses, in some cases exceeding N10 million per trip.
Despite the domestic challenges, reports indicate that the Dangote Petroleum Refinery, valued at approximately $20 billion, is recording significant margins from jet fuel production. However, a substantial portion of its output is reportedly being exported to Europe, where pricing is more competitive and demand remains strong.
Although the refinery is said to meet Nigeria’s daily jet fuel demand—estimated at about 2.1 million litres—industry stakeholders argue that local prices remain elevated due to logistics, storage, and distribution costs. According to the Airline Operators of Nigeria, jet fuel prices have reached as high as N3,300 per litre in some locations.
Compounding the situation is a growing debt burden within the aviation ecosystem. Domestic airlines are reported to owe approximately N9 billion to ground handling companies, including Nigerian Aviation Handling Company and Skyway Aviation Handling Company.
These firms had earlier threatened to suspend services, a move that could have effectively grounded flight operations nationwide. However, the aviation ministry is currently intervening to mediate between the parties and prevent disruptions to air travel.
Industry analysts say the Federal Government’s latest intervention reflects the urgency of the situation, as continued cost pressures could force airlines to scale down operations or suspend services entirely.
The introduction of a credit window for fuel purchases is expected to ease immediate liquidity constraints, allowing airlines to maintain operations while longer-term solutions are explored.
Stakeholders have also emphasised the need for structural reforms, including improved domestic refining capacity, better distribution systems, and policy consistency, to ensure the long-term stability of the aviation sector.
As negotiations and interventions continue, attention remains focused on whether the combined measures will be sufficient to stabilise the industry and prevent further disruptions to Nigeria’s air transport system.
