Nigeria: Airlines threaten to halt flights due to soaring jet fuel prices

Companies warned Aviation Nigeria has threatened to suspend all its air operations from April 20 if no action is taken to reduce jet fuel prices, which it described as "unjustifiably high," according to Reuters.

This warning came via the Airline Operators Association of Nigeria, which includes about 12 local airlines, as it sent an official letter to the Major Energy Marketers Association of Nigeria, objecting to the large increase in fuel prices.

Record jump in fuel prices

The companies noted that jet fuel prices have risen by about 270% since late February, an increase they deemed “astronomical and artificial,” asserting that it far exceeds the increases recorded in global crude oil prices.

She added that current revenues are no longer sufficient to cover fuel costs alone, putting airlines in a precarious financial position that threatens continued operation.

Effects of war and supply disruptions

This escalation comes amid rising global energy prices as a result of geopolitical tensions, particularly with the impact of the conflict related to the Strait of Hormuz on global shipping.

Despite these factors, airlines maintain that domestic prices in Nigeria have unjustifiably exceeded global levels, further complicating the crisis.

Potential repercussions for the aviation sector

Companies have warned that raising ticket prices to keep up with fuel costs could lead to a decline in passenger numbers, while suspending flights would have wider repercussions including job losses, increased pressure on banks, and a decline in economic activity.

Jet fuel is one of the biggest cost items in Africa, representing between 30% and 40% of total operating expenses, compared to a global average of between 20% and 25%, making airlines on the continent more vulnerable to price fluctuations.

local supply crisis

Official data showed that Nigeria’s aviation sector consumes about 2.1 million liters of jet fuel per day, but Dangote Refinery, the main domestic producer, made no deliveries to the domestic market during March.

Conversely, Nigeria's exports of refined petroleum products rose significantly during the same period, raising questions about distribution priorities between the domestic market and exports.

A sector under pressure and awaiting solutions

This crisis reflects the scale of the challenges facing the aviation sector in Nigeria, given the high costs and the limited ability to pass them on to the consumer.

If a quick solution is not reached, the sector could experience significant disruptions in the coming days, with the possibility of flights being suspended and the impact this would have on transportation and the economy in general.