Nigerian airlines threaten shutdown over fuel costs

Airlines in Nigeria have warned they will suspend flight operations from April 20 if rising jet fuel prices are not addressed, according to the Airline Operators of Nigeria.

The group said jet fuel prices have surged by about 270 per cent since late February, describing the increase as “astronomical” and misaligned with global crude oil trends.

In a letter to the Major Energies Marketers Association of Nigeria, the airlines said current revenues are no longer sufficient to cover fuel costs.

“Airline revenues are insufficient to cover the cost of fuel alone,” the group stated.

The warning comes as global aviation faces rising fuel costs linked to geopolitical tensions, with African carriers particularly exposed due to higher operating cost structures.

Industry data shows jet fuel accounts for up to 40 percent of airline operating costs in Africa, significantly above the global average.

Fuel marketers, however, have challenged the airlines’ claims, stating that the quoted prices are significantly higher than prevailing market rates and reflect the cost of specialised distribution and handling.

The airlines warned that increasing ticket prices to offset costs could reduce passenger demand, while a shutdown of operations would have wider economic impacts, including job losses.

Nigeria’s aviation sector consumed over 2 million litres of jet fuel daily in March, according to regulatory data.

At the same time, the Dangote Petroleum Refinery did not supply jet fuel to the domestic market during the period, despite increased exports of refined petroleum products.

SOURCE: Reuters