Nigeria has moved to cap jet fuel prices and introduce emergency support measures for airlines, as authorities seek to prevent flight disruptions triggered by soaring aviation fuel costs.
According to a government document, the Nigerian Midstream and Downstream Petroleum Regulatory Authority has set indicative price caps for aviation fuel, commonly known as Jet A1, in key markets. Prices in Lagos are expected to range between 1,760 naira and 1,988 naira per litre ($1.29 to $1.46), while in Abuja they are set between 1,809 naira and 2,037 naira.
The regulator cautioned that prices could still fluctuate due to global market volatility, particularly linked to geopolitical tensions such as the ongoing U.S.–Iran conflict, which has pushed up energy costs.
Emergency measures to stabilise aviation sector
The price cap forms part of a broader intervention package aimed at stabilising Nigeria’s aviation industry, which has been under pressure from rising fuel prices that have significantly increased operating costs.
Airlines had warned that jet fuel prices had surged by more than 270 percent, forcing ticket price hikes and raising the risk of reduced flight capacity or service disruptions.
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To ease the burden, authorities have agreed to allow airlines to purchase fuel on a 30-day credit basis, providing short-term liquidity relief. The aviation ministry has also been tasked with mediating debt disputes between airlines and fuel suppliers.
The measures follow directives from Bola Ahmed Tinubu, who recently approved a 30 percent reduction in airlines’ debts to aviation agencies and ordered stakeholders to agree on a fair pricing framework within 72 hours.
Push for supply chain reforms
A technical committee set up by the NMDPRA recommended additional steps to improve efficiency and transparency in the fuel supply chain. These include encouraging fuel marketers to sell directly to airlines within the capped price range, reducing intermediary costs.
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The committee also called for engagement with Dangote Petroleum Refinery and Petrochemicals regarding pricing premiums applied to international benchmarks used in determining jet fuel costs.
Other proposals include stricter validation of airside fuel distributors to ensure they have adequate infrastructure, a move that could reduce the number of authorised suppliers operating at airports.
Managing foreign exchange risks
Authorities are also exploring the inclusion of jet fuel in Nigeria’s naira-for-crude initiative, which allows local transactions in domestic currency to reduce exposure to foreign exchange volatility.
Analysts say this could help airlines manage currency risks, as many of their costs—including fuel—are linked to the U.S. dollar.
Sector under pressure
Nigeria’s aviation industry has faced mounting challenges in recent years, including high operating costs, currency depreciation and infrastructure constraints.
Fuel typically accounts for a significant portion of airline expenses, and sharp increases in Jet A1 prices have had a direct impact on ticket pricing and profitability.
While the government’s intervention is expected to provide short-term relief, experts caution that longer-term solutions will require structural reforms, including improved local refining capacity, more efficient supply chains and stable foreign exchange policies.
For now, the price caps and support measures are aimed at preventing immediate disruptions and maintaining stability in a sector critical to domestic and regional connectivity.
