Airlines threaten to halt flights within days over soaring jet fuel prices

Nigerian airlines are poised to suspend all flight operations from 20 April, issuing a stark warning that they will do so unless the "crippling" cost of jet fuel, which they accuse the country's marketers of artificially inflating, is significantly reduced.

The Airline Operators of Nigeria (AON), an industry body representing approximately a dozen predominantly domestic carriers, formally wrote to the Major Energies Marketers Association of Nigeria on 14 April. Their letter highlighted an alarming 270 per cent surge in jet fuel prices since late February.

In the correspondence, seen by Reuters, AON described the price hike in Africa's most populous nation as "astronomical and artificial," asserting that it vastly outstripped global crude oil price movements. The letter stated: "Currently, airline revenues are insufficient to cover the cost of fuel alone."

While soaring jet fuel prices, a consequence of the Iran war, have disrupted the global aviation industry – prompting fare increases and revised growth plans – African airlines face particular vulnerability. Jet fuel typically constitutes between 30 and 40 per cent of their operating costs, significantly higher than the global average of 20 to 25 per cent, according to the African Airlines Association.

MEMAN disputed the airlines' figures in a response ⁠to the AON seen by Reuters, saying the quoted price was more than 40% above a survey-based market average, adding that jet fuel distribution involves specialised equipment and handling that make it more cost-intensive.

AON said that raising ticket prices to reflect the fuel costs airlines are facing in Nigeria could reduce passenger numbers, while a shutdown of airline operations would have broader repercussions, hurting banks, ‌costing jobs and worsening insecurity.

Nigeria’s aviation sector consumed about 2.1 million ​litres of jet fuel per day last month, data from the ‌country's petroleum products regulator showed.

However, the giant ⁠Dangote Petroleum Refinery - Nigeria's sole domestic jet fuel producer - made no ⁠deliveries to the domestic market in March, the data showed.

At the same time, data from tanker-tracking ‌firm Kpler showed Nigeria's ​exports of clean petroleum products - gasoline, diesel, ‌kerosene and jet fuel - more than ​doubled month-on-month in March.

Dangote did not immediately respond to a request for comment.