JET A1 REACHES N3,000/LITRE: AIRLINES THREATEN SHUTDOWN IN NIGERIA
Read Time:2 Minute, 19 Second
By:Tajudeen Aminat
Domestic and international airlines operating in Nigeria may begin shutting down services from April 20 following a sharp rise in aviation fuel (Jet A1) to about N3,000 per litre.
Tunji Oyebanji, Chief Executive of Energy Advisory and former Chairman of Mobil Nigeria, disclosed this in a statement on Friday.
He warned that at least one airline may have already suspended operations, as operators struggle with the rising fuel cost, which they describe as unsustainable.
According to him, the situation is driven by both local supply conditions and tightening global markets linked to ongoing tensions in the Middle East, particularly involving Iran and the United States and Israel.
He said airlines are threatening to halt operations from April 20 due to the high cost of Jet A1, adding that one carrier may already have shut down services.
Oyebanji further explained that most aviation fuel marketers in Nigeria currently rely on local refinery supply, which has become a key player in the domestic market.
However, he noted that unlike international carriers that operate under long-term supply contracts, local airlines mainly purchase fuel on a spot basis at airport tarmacs or depots, leaving them more exposed to price fluctuations.
He explained that while spot purchases can sometimes be cheaper when supply is abundant, prices rise sharply during shortages. In contrast, international airlines benefit from long-term contracts that help stabilize costs even when market prices increase.
Oyebanji added that the lack of hedging mechanisms further exposes domestic carriers to sudden market shocks, while foreign airlines are better insulated due to structured supply arrangements.
He also pointed out financial pressures in the sector, noting that aviation fuel transactions in Nigeria carry high credit risks for oil marketing companies, which has led many suppliers to demand cash payments.
According to him, this creates additional strain on airlines’ working capital.
Beyond pricing and supply issues, he urged airlines to review their business practices, alleging that some operators significantly increase ticket prices during peak travel seasons.
He also linked the situation to global supply challenges, saying Jet A1 availability has dropped due to disruptions in Middle Eastern refining output amid ongoing conflict, which has driven up international demand.
He noted that in the United Kingdom, several airlines have reduced flight operations due to fuel shortages.
Oyebanji further stated that increased exports from the Dangote Refinery to meet global demand have raised concerns about possible impacts on domestic supply.
He warned that without urgent intervention, Nigeria’s aviation sector could face a deeper crisis driven by fuel scarcity and rising costs.
The MEDIA reports that the Iran–US–Israel conflict, which escalated on February 28, 2026, has disrupted global markets, pushing crude oil prices above $100 per barrel and contributing to rising petroleum product costs worldwide.
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