Airlines operating in Nigeria are facing a looming shutdown as the price of aviation fuel, JetA1, surges to nearly N3,000 per litre.
Tunji Oyebanji, Chief Executive of Energy Advisory and former Chairman of Mobil Nigeria, disclosed that some operators may suspend services starting April 20 due to rising costs. According to him, at least one airline may have already halted operations.
“Airlines are threatening to shut down operations effective April 20th due to the high cost of JetA1. One may already have suspended operations. They argue that the prevailing price of N3,000 per liter is not sustainable,” Oyebanji said.
He linked the spike in fuel prices to both local supply challenges and global pressures stemming from tensions in the Middle East, particularly involving Iran and the United States-Israel.
Oyebanji explained that local airlines are more exposed to price fluctuations because they typically purchase fuel on the spot rather than through long-term contracts.
“Unlike international airlines that sign long-term contracts with suppliers, local airlines generally buy spot on the tarmac. Which means that when supply is tight, prices will be higher, but when there is a glut, prices at the tarmac are generally much cheaper than if you have a long-term contract tied in at higher prices,” he said.
He also pointed to financial constraints, noting that fuel suppliers often demand cash payments due to high credit risks associated with domestic airlines.
“Sales to domestic airlines carry very high credit risk. Hence, OMC prefers selling on a cash basis, which is a challenge to their working capital,” he said.
Globally, reduced JetA1 supply linked to the Middle East conflict has intensified demand, pushing prices higher and forcing some international airlines to scale back flights.
Oyebanji warned that without urgent action, Nigeria’s aviation sector could face a major disruption driven by fuel scarcity and escalating operational costs.
