Nigeria’s government has moved to stabilise aviation operations by capping jet fuel prices and allowing airlines to purchase fuel on credit, according to a government document seen by Reuters, as authorities seek to prevent flight disruptions driven by rising costs.
- The Nigerian government is capping jet fuel prices and allowing airlines to buy on credit to avoid flight disruptions due to rising costs.
- Aviation fuel will be sold at regulated price bands in Lagos and Abuja, though prices may still fluctuate due to global market tensions.
- These steps follow emergency talks as airlines faced jet fuel price hikes of over 270%, prompting concerns about ticket hikes and capacity cuts.
- President Tinubu approved a 30% debt relief for airlines and set a 72-hour deadline to agree on fair fuel prices, with a 30-day payment window for airlines.
Nigeria’s government has moved to stabilise aviation operations by capping jet fuel prices and allowing airlines to purchase fuel on credit, according to a government document seen by Reuters, as authorities seek to prevent flight disruptions driven by rising costs.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said aviation fuel should be sold within a price band of 1,760 to 1,988 naira per litre in Lagos, and 1,809 to 2,037 naira per litre in Abuja, based on benchmarks from April 17 to April 23.
It noted, however, that prices could still fluctuate due to market volatility linked to global tensions, including the U.S.–Iran situation, as well as higher supplier costs, Reuters reported.
Fuel surge drives emergency talks
The move follows emergency talks between government officials and industry stakeholders after airlines warned that jet fuel prices had surged by more than 270%, forcing ticket price increases and raising concerns about potential capacity cuts.
President Bola Tinubu last week approved a 30% relief on airlines’ debts to aviation agencies. It directed fuel marketers, airlines, and regulators to agree on a “fair” fuel price within 72 hours to avoid a sector-wide shutdown. As part of the outcome, airlines were granted a 30-day credit window to pay for fuel, while the aviation ministry was tasked with mediating disputes between operators and oil marketers.
A technical committee set up by the NMDPRA also recommended that fuel marketers sell directly to airlines within the approved price range to reduce costs and improve supply chain transparency.
In addition, regulators were urged to engage with Dangote Petroleum Refinery and Petrochemicals regarding increased pricing premiums tied to international jet fuel benchmarks.
Other proposals include validating airside fuel distributors with sufficient infrastructure, potentially reducing the number of suppliers at airports, and considering the inclusion of jet fuel in Nigeria’s naira-for-crude initiative to help limit airlines’ exposure to foreign exchange pressures.
