Dangote Petroleum Refinery has set the gantry price of Jet A1 aviation fuel at ₦1,820 per litre, a move aimed at increasing transparency in Nigeria's aviation fuel market. This development comes as airlines continue to struggle with rising operational costs, with actual market prices still exceeding regulatory benchmarks.
Pricing Gap Persists Despite NMDPRA Guidance
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had earlier recommended a price range of ₦1,760 to ₦1,988 per litre in Lagos and about ₦2,037 per litre in Abuja, based on import costs and exchange rates. However, checks reveal that marketers are still selling aviation fuel at approximately ₦2,230 per litre or more, well above the suggested band. This disparity has raised concerns about pricing practices and the role of intermediaries in the supply chain.
Stakeholders Call for Greater Transparency
The CEO of Petroleumprice.ng, Olatide Jeremiah, emphasized the need for pricing clarity. He stated, 'There is a lack of transparency in jet fuel pricing. Dangote Refinery should, as a matter of urgency, publish its daily jet fuel gantry prices. This would erode abnormal margins by middlemen and help curb artificial hikes in jet fuel prices that are threatening to cripple businesses in Nigeria's aviation sector.'
Airline operators argue that the issue extends beyond regulation. Chibuike Uloka, spokesperson for United Nigeria Airlines, explained, 'It's not a controlled market; it's a free market. So, the NMDPRA cannot fix prices. Rather, based on its findings and market assessments—such as landing cost and other factors, it is only suggesting what the price should be. But marketers are still selling at their own rates, and no one has been able to call them to order. This issue goes beyond United Nigeria Airlines; it affects all members of the Airline Operators of Nigeria (AON).'
Financial Strain on Airlines
The financial impact is already evident. According to Uloka, 'If we are to speak on how this affects us, we can say, as Ibom Air earlier noted, that the cost of fuel per operation rose from ₦2.9 million in January to ₦7.6 million. For operators like us that use Airbus aircraft, with higher fuel capacity and longer endurance, the cost is even double that figure.'
Jet fuel typically accounts for 30% to 40% of airline operating costs globally. In Nigeria, where most aviation fuel has historically been imported, foreign exchange fluctuations and supply chain inefficiencies have made pricing particularly volatile. Industry observers believe that local refining capacity, especially from Dangote Refinery, could help stabilize supply in the long term. However, for now, the disconnect between official guidance and market prices continues to threaten profitability and could eventually lead to higher ticket fares for passengers.
