Business – Page 51 – National Daily Newspaper

NNPCL raises petrol price to ₦1,405 per litre amid discount controversy

NNPCL slashes petrol price by N75 as competition heats up in fuel market

The Nigerian National Petroleum Company Limited (NNPCL) has reduced the pump price of Premium Motor Spirit (PMS), commonly known as petrol, by N75 per...

Nigeria’s domestic aviation sector is under fresh financial pressure following the introduction of a new 5% federal levy on air tickets, intensifying concerns over rising operating costs, fragmented taxation, and expensive aircraft leasing arrangements that airlines say are threatening industry sustainability. The new levy, introduced as part of aviation revenue reforms, is collected alongside existing statutory charges imposed by multiple agencies. Airline operators say the additional deduction further compresses already thin profit margins in an industry already weighed down by high jet fuel prices, regulatory fees, and foreign-exchange–linked obligations. Industry stakeholders warn that the cumulative effect could push up ticket prices, dampen passenger demand, and worsen liquidity challenges for domestic carriers already struggling with cash flow constraints. Rising Tensions Between Regulators and Airlines The financial strain has coincided with renewed friction between the Nigeria Civil Aviation Authority (NCAA) and the Airline Operators of Nigeria (AON), following disputes over the remittance of statutory charges and the delivery of regulatory services. Operators say the situation reflects deeper systemic liquidity stress across the sector, where airlines are increasingly unable to meet overlapping obligations imposed by aviation agencies while maintaining operational stability. A Layered and Fragmented Tax System At the centre of industry complaints is what operators describe as a “multi-layered and excessive” taxation structure involving the NCAA, the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Airspace Management Agency (NAMA). Airlines such as Air Peace, Ibom Air, and United Nigeria Airlines are subject to a range of compulsory charges, including the 5% ticket levy, passenger service charges, value-added tax on tickets and aviation inputs, and other operational deductions collected at different stages of the value chain. Industry players argue that the system creates cash flow distortions because several charges are collected upfront or deducted at source, leaving airlines with reduced working capital for day-to-day operations. Beyond ticket-based deductions, carriers also face landing fees, parking charges, overflight fees, navigation levies, and ground handling costs. Combined with jet fuel, which accounts for a significant share of total operating expenses, analysts say profitability on many domestic routes has been severely constrained. Leasing Constraints and Foreign Exchange Pressure Airlines’ challenges are compounded by difficulties in aircraft acquisition and leasing, which remain essential for fleet expansion in the absence of strong local financing options. Most carriers rely on wet and dry lease arrangements from international lessors. Wet leases, which include aircraft, crew, maintenance, and insurance, allow quick capacity deployment but are costly and typically paid in foreign currency. Regulatory limits also restrict their use to short-term arrangements. Dry leases offer more operational control and long-term stability but are increasingly difficult to secure. International lessors often view Nigeria as a high-risk environment due to concerns over aircraft repossession and currency volatility, resulting in higher insurance premiums, security deposits, and financing costs. As a result, airlines are frequently forced into short-term leasing agreements, exposing them to exchange-rate fluctuations and operational disruptions that contribute to flight delays and cancellations. Fuel Costs Deepen Financial Strain Jet A1 fuel remains one of the largest cost drivers in the sector, further squeezing margins across domestic routes. With fuel expenses, taxes, and leasing obligations combined, industry analysts say many airlines are operating with extremely narrow or unstable margins. Operators warn that without coordinated policy reforms, sustained profitability and expansion in the sector will remain difficult. Calls for Structural Reform Aviation stakeholders are calling on the federal government to streamline overlapping charges, review the newly introduced 5% levy, and consider removing VAT on aviation inputs to ease cost pressures. They are also advocating for reforms to centralise fee collection processes, improve transparency in regulatory charges, and support more stable aviation fuel supply mechanisms. In addition, industry groups are pushing for the development of a local aircraft leasing framework to reduce dependence on expensive international markets. Outlook While policymakers continue to explore potential incentives, including tax relief measures and leasing reforms, airlines say they are already adjusting operations through capacity cuts, route optimisation, and tighter financial controls. For now, Nigeria’s domestic carriers remain under significant pressure, navigating what industry players describe as one of the most financially challenging periods in recent years.

Aviation4 months ago

Heading through the storm: Multiple taxes, complex leasing drag on Nigerian carriers

Nigeria’s domestic aviation sector is under fresh financial pressure following the introduction of a new 5% federal levy on air tickets, intensifying concerns over rising operating...

IMF warns Nigeria against restoring blanket petrol subsidy

Business4 months ago

Fitch, IMF flag risks over Nigeria’s proposed $5bn derivative swap deal

Global ratings agency Fitch Ratings has raised concerns over Nigeria’s proposed $5 billion Total Return Swap (TRS) arrangement with First Abu Dhabi Bank, warning that the...

Business4 months ago

NAC 2026 to explore future of marketing communications in era of AI, digital transformation

Nigeria’s advertising and marketing communications industry is preparing for one of its most significant annual gatherings as stakeholders across the sector converge for the 2026...

Oil prices fall below $93 as U.S.–Iran ceasefire talks ease supply fears

Energy4 months ago

Global oil prices fall after U.S.–Iran talks

Global crude oil prices declined on Monday after high-level talks between the United States and Iran in Switzerland produced a 60-day diplomatic roadmap aimed at easing...

Sterling near 2026 lows amid UK political turmoil, robust US dollar demand

Business4 months ago

Sterling near 2026 lows amid UK political turmoil, robust US dollar demand

The British Pound Sterling is edging close to its weakest level of the year against the Nigerian Naira, as a mix of domestic political...

NCC, CAC tighten rules on telecom ownership changes, mandate approval for 10% share transfers

Business4 months ago

NCC, CAC tighten rules on telecom ownership changes, mandate approval for 10% share transfers

The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have introduced new regulatory requirements governing changes in the ownership structure of licensed...

Nigeria Customs to retire 1,516 officers as service begins major workforce transition

Business4 months ago

Nigeria Customs to retire 1,516 officers as service begins major workforce transition

The Nigeria Customs Service (NCS) is set to witness one of its largest personnel transitions in recent years, with a total of 1,516 officers...

Between Payment Agents and Monieverse: How Modern Payment Solutions Are Helping Nigerian Traders Navigate Cross-Border Payments

Business4 months ago

Between Payment Agents and Monieverse: How Modern Payment Solutions Are Helping Nigerian Traders Navigate Cross-Border Payments

LAGOS, Nigeria — As Nigeria’s import and export sector continues to expand, efficient cross-border payments have become one of the most important factors determining whether businesses...

Nigerian equities lose N5.69tn in one week as market selloff intensifies

Business5 months ago

Nigerian equities lose N5.69tn in one week as market selloff intensifies

The Nigerian stock market has entered one of its most challenging periods of 2026, with investors losing an estimated N5.69 trillion in a single...