Aviation Crisis Looms as Nigerian Airlines Face Grounding Over N3,000 Fuel Costs

Domestic and international carriers serving Nigeria may suspend operations starting April 20 as aviation fuel prices soar to N3,000 per liter.

Tunji Oyebanji, CEO of Energy Advisory and former Mobil Nigeria Chairman, reported that this unsustainable cost has already pushed at least one airline to halt services.

Oyebanji explained that local airlines are particularly vulnerable because they purchase fuel on a spot basis at airports, lacking the long-term supply contracts and hedging mechanisms used by global carriers.

This leaves domestic operators highly exposed to price volatility and the financial pressure of being forced to pay for fuel in cash due to credit risks.

The current price surge is driven by a combination of local supply factors and a global JetA1 shortage linked to the conflict involving Iran, the United States, and Israel. Crude oil prices exceeding $100 per barrel have exacerbated the situation.

Furthermore, while the Dangote Refinery is a major local supplier, a portion of its production is being exported, raising concerns about the adequacy of domestic availability.

Oyebanji also pointed to operational issues, suggesting that some airlines have inflated ticket prices excessively during high-demand periods. He warned that unless swift interventions occur, the Nigerian aviation industry faces a severe crisis fueled by scarcity and escalating operational expenses.