Dangote Petroleum Refinery and Petrochemicals has reduced the price of aviation fuel (Jet A1) to ₦1,650 per litre from ₦1,750, in a move that could ease long-standing cost pressures on Nigeria’s aviation sector, where fuel volatility has remained a central challenge.
The price adjustment was announced in a statement issued on Monday.
The refinery also introduced a 30-day interest-free credit facility for marketers and airline operators, backed by bank guarantees, and confirmed a shift from a dollar-denominated pricing structure to a naira-based model aimed at reducing foreign exchange exposure in aviation fuel transactions.
*Aviation fuel cost crisis
Nigeria’s aviation industry has, for years, grappled with unstable Jet A1 pricing, driven by a combination of forex scarcity, reliance on imported refined products, and fluctuations in global crude oil prices.
At several points in recent years, airlines have warned that aviation fuel accounts for the largest share of their operating expenses, often exceeding aircraft maintenance and personnel costs combined. This has made ticket pricing highly sensitive to fuel movements, with sudden increases forcing fare hikes and reducing passenger demand.
During periods of acute scarcity, airlines have also faced operational disruptions, including delayed flights, reduced frequencies, and in some cases, temporary suspension of routes due to inability to access affordable fuel.
*Global energy shocks and supply volatility
The aviation fuel market globally has been heavily impacted by energy shocks triggered by geopolitical tensions, supply chain disruptions, and post-pandemic demand surges.
These global developments pushed jet fuel prices upward across multiple regions, with countries dependent on imports experiencing sharper impacts due to currency depreciation and shipping-related cost increases.
For Nigeria, these external shocks have historically translated into higher landing costs for airlines, worsening an already fragile operating environment.
*Airline operators’ warnings and industry pressure
At various times, airline operators have issued strong warnings over rising Jet A1 costs, describing the situation as unsustainable without urgent intervention.
Operators have previously threatened capacity cuts, fleet downsizing, and possible route suspensions if fuel prices continued to rise unchecked, arguing that maintaining operations under such conditions threatens the survival of domestic carriers.
Industry groups have consistently called for emergency interventions, including stabilisation mechanisms, improved access to forex, and accelerated domestic refining capacity to reduce dependence on imported aviation fuel.
*Government interventions and policy responses
In response to repeated crises in the aviation sector, government authorities have at different times engaged stakeholders through policy discussions aimed at improving fuel availability and reducing cost pressures.
Interventions have included engagement with downstream operators, efforts to liberalise parts of the petroleum sector, and policy support for domestic refining projects designed to reduce import dependence.
The development of large-scale private refining capacity, particularly the emergence of Dangote Refinery, has been positioned as a structural shift expected to improve supply stability and moderate long-term pricing volatility.
*Implications of the latest price cut
The reduction to ₦1,650 per litre is expected to provide short-term relief for airlines struggling with high operational costs, particularly in a market where fuel pricing directly influences ticket fares and route profitability.
The introduction of credit facilities is also seen as a liquidity support measure that could ease cash flow constraints for operators in the short term.
However, experts noted that while domestic refining capacity may help reduce import-linked shocks, broader pressures such as exchange rate instability and global crude oil fluctuations will continue to influence aviation fuel pricing dynamics.
Stakeholders are expected to monitor whether the latest adjustment signals a sustained downward trend or a temporary response to competitive and market pressures within the downstream sector.
