JetA1 soars to N3,000 per litre as airlines threaten shutdown from April 20

Domestic and foreign airlines operating in Nigeria may begin suspending services from April 20 following a sharp rise in the price of aviation fuel, JetA1, to about N3,000 per litre, industry stakeholders have warned.

Tunji Oyebanji, Chief Executive of Energy Advisory and former Chairman of Mobil Nigeria, disclosed this in a statement on Friday, cautioning that at least one airline may have already halted operations due to the unsustainable cost of fuel.

According to Oyebanji, airlines are struggling to cope with the soaring JetA1 prices, which he attributed to a combination of domestic supply constraints and tightening global markets triggered by the ongoing conflict involving Iran and the United States–Israel alliance.

“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 litre is not sustainable,” he said.

Oyebanji explained that most aviation fuel marketers in Nigeria currently source JetA1 from the Dangote Refinery, which has emerged as a dominant supplier in the domestic market.

However, he noted a structural disadvantage for local airlines. Unlike many international carriers that operate under long-term supply agreements, Nigerian airlines largely buy fuel on a spot basis at airport depots or directly on the tarmac. This leaves them highly exposed to price volatility.

“When supply is tight, prices will be higher. When there is a glut, prices at the tarmac are cheaper than if you have a long-term contract tied in at higher prices,” Oyebanji said.

He added that the absence of fuel hedging mechanisms further exposes domestic carriers to abrupt market swings, while foreign airlines are better insulated by structured procurement contracts and risk management strategies.

Beyond pricing volatility, Oyebanji highlighted financing constraints in the aviation fuel supply chain. He said transactions involving domestic airlines carry high credit risks for oil marketing companies, forcing many suppliers to insist on cash payments.

“Sales to domestic airlines carry very high credit risk. Hence, oil marketing companies prefer selling on a cash basis, which is a challenge to the airlines’ working capital,” he stated.

The development, he warned, could deepen liquidity pressures for operators already grappling with foreign exchange shortages, aircraft maintenance costs, and rising insurance premiums.

Industry analysts link the surge in JetA1 prices to global supply disruptions stemming from the Iran–US–Israel conflict, which escalated on February 28, 2026. The crisis has driven crude oil prices above $100 per barrel and tightened refining output in parts of the Middle East.

READ ALSO; Airlines threaten nationwide shutdown as Jet A1 price soars above N3,000 per litre

Oyebanji said JetA1 supplies from some Middle Eastern refineries have dropped significantly, leading to heightened global demand and supply competition.

“In the United Kingdom, for instance, some airlines have reduced flights because of JetA1 shortages,” he claimed.

Energy economist Dr. Adewale Shonibare noted that aviation fuel is typically more sensitive to geopolitical shocks because of its specialized refining process.

“When crude prices rise above $100 per barrel, the impact on refined products like JetA1 is amplified, especially if refining capacity is disrupted. Countries without diversified supply chains feel the shock more acutely,” he explained.

Shonibare added that Nigeria’s reliance on limited local supply and spot purchases makes its aviation sector particularly vulnerable during global crises.

While acknowledging the pressure on airlines, Oyebanji also urged operators to review their pricing strategies, alleging that some carriers significantly increase fares during festive and peak travel seasons.

“They also jack up prices astronomically during festive seasons,” he said, suggesting that better revenue management could provide some buffer against fuel shocks.

Aviation analyst Group Capt. John Ojikutu (rtd) warned that prolonged service disruptions could have wider economic implications.

“If airlines begin to shut down operations, it will affect business travel, tourism, cargo logistics, and investor confidence. The aviation sector is a critical enabler of economic activity,” he said.

Concerns are also mounting over reports that a significant portion of production from the Dangote Refinery is being exported to meet global demand, raising questions about domestic supply prioritisation.

Oyebanji cautioned that without urgent policy intervention—such as improved access to foreign exchange, structured fuel supply contracts, or government-backed support mechanisms—the aviation sector could face another major crisis driven by fuel scarcity and escalating operating costs.

As April 20 approaches, industry stakeholders say the coming days will be critical in determining whether negotiations between airlines, fuel suppliers, and regulators can avert widespread service disruptions across Nigeria’s air transport network.