The Federal Government of Nigeria has moved to stabilise jet fuel prices in a bid to ease pressure on airlines operating in the country’s aviation sector.
The intervention, led by the Minister of Aviation and Aerospace Development, Festus Keyamo, in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, is aimed at addressing the ongoing crisis around aviation fuel supply and pricing.
However, the move has sparked concerns across both the aviation and downstream petroleum sectors, with stakeholders warning that price controls in a deregulated market could distort operations.
Concerns Over Market Distortion
Some industry analysts argue that the aviation fuel market should be left to operate freely based on supply and demand.
They warn that government price intervention could lead to shortages, black-market activity, and possible safety risks if suppliers are unable to recover costs.
There are also fears that the move could resemble a return to subsidy-like practices in a sector that has been deregulated.
Government Steps In to Broker Truce
Despite the concerns, the aviation minister and the regulatory authority have begun a series of meetings with key stakeholders, including airline operators and fuel marketers.
According to official summaries, discussions held between April 22 and April 24, 2026, focused on resolving disputes over supply and pricing of aviation fuel.
A technical committee involving government agencies, airlines, and marketers was also constituted to recommend solutions.
Proposed Price Range Set
The committee reportedly agreed on an indicative end-user price for aviation fuel:
- Lagos: N1,760 – N1,988 per litre
- Abuja: N1,809 – N2,037 per litre
The prices are based on global crude benchmarks and reflect volatility caused by international tensions, including the U.S–Iran conflict.
It was also agreed that fuel marketers should sell directly to airlines within the approved price window.
Structural Reforms Under Discussion
Other recommendations include:
- Adjusting pricing premiums linked to refinery benchmarks
- Validating airside fuel distributors
- Reducing the number of licensed airside operators
- Introducing a 30-day credit window for airlines
- Exploring the inclusion of aviation fuel under the naira-for-crude initiative
Airlines Warn of Operational Pressure
Airline operators say the rising cost of aviation fuel is already threatening operations.
Ibom Air reported that fuel costs have increased by more than 350 per cent within months, rising from about N2.1 million per flight in January to about N7.6 million per flight.
The airline warned that continued increases could force flight reductions or capacity cuts.
Operators also questioned why local fuel prices remain high despite significant supply from domestic refineries.
Labour and Economic Concerns
The Trade Union Congress of Nigeria has also urged government intervention, warning that rising fuel prices are worsening inflation, transport costs, and living conditions.
The union called for temporary tax relief for workers and manufacturers, and urged the government to use excess crude revenues to support local refining and reduce fuel costs.
It also criticised rising electricity tariffs and warned that insecurity and production costs are adding further pressure on the economy.
Sector at a Crossroads
While the government maintains that its intervention is aimed at stabilising prices and preventing airline collapse, critics insist that market-driven pricing remains the most sustainable approach.
With fuel costs still volatile and airlines warning of possible disruptions, stakeholders say the coming weeks will be critical in determining whether the intervention stabilises the sector or triggers further imbalance.
