Airlines in Nigeria have threatened shutdown as JetA1 price hit N3,000/litre.
NewsOnline Nigeria reports that domestic and international airlines operating in Nigeria may begin suspending operations from April 20 following a sharp rise in aviation fuel prices, with JetA1 now selling for about N3,000 per litre.
The warning was issued by Tunji Oyebanji, Chief Executive of Energy Advisory and former Chairman of Mobil Nigeria, who said operators are struggling to cope with the soaring cost.
According to him, at least one airline may have already halted services, as carriers insist the current pricing is unsustainable.
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“Airlines are threatening to shut down operations effective April 20 due to the high cost of JetA1. One may already have suspended operations,” Oyebanji said.
He attributed the spike to a combination of domestic supply constraints and tightening global markets driven by the ongoing conflict involving Iran, the United States, and Israel.
Oyebanji explained that most aviation fuel marketers in Nigeria now rely heavily on local supply, particularly from the Dangote Refinery, which has emerged as a key domestic source.
However, unlike international carriers that secure fuel through long-term contracts, local airlines largely depend on spot purchases at airport depots, leaving them highly exposed to price volatility.
“Local airlines buy fuel on the spot, meaning prices spike when supply is tight, unlike long-term contracts that offer some stability,” he noted.
He further highlighted the absence of hedging mechanisms for domestic carriers, making them vulnerable to sudden market fluctuations, while international airlines remain relatively shielded through structured supply agreements.
Financial constraints are also compounding the crisis, as oil marketing companies prefer cash-based transactions due to high credit risks associated with domestic airlines, placing additional pressure on operators’ working capital.
Beyond fuel costs, Oyebanji urged airlines to review their pricing strategies, noting that fares often rise sharply during peak travel seasons.
On the global front, he pointed to a decline in JetA1 availability due to reduced output from Middle Eastern refineries amid the conflict, which has pushed up demand and prices worldwide.
He added that some airlines in countries like the United Kingdom have already scaled back flights due to supply shortages.
There are also concerns that a significant share of locally refined fuel is being exported to meet international demand, potentially tightening domestic supply further.
Oyebanji warned that without urgent intervention, Nigeria’s aviation sector could face a major disruption driven by fuel scarcity and escalating costs, as the ripple effects of the Middle East crisis continue to push global oil prices above $100 per barrel.
