Nigeria’s aviation sector is grappling with intensifying cost pressures following a fresh pricing benchmark introduced by the Dangote Petroleum Refinery, which has pegged the gantry price of aviation fuel (Jet A1) at N1,820 per litre. The move, which also includes the commencement of daily price publication, is aimed at improving transparency and addressing long-standing inefficiencies in the jet fuel supply chain. However, industry stakeholders say the development underscores the persistent financial strain facing domestic airlines, many of which are already battling rising operational costs.
According to data from Petroleumprice.ng, the refinery’s pricing structure introduces a more predictable framework in a market historically characterised by opacity and volatility. For Nigerian carriers, aviation fuel remains the single largest cost component, accounting for over 40 per cent of total operating expenses. The new N1,820 per litre benchmark, while offering clarity, still reflects elevated cost levels that continue to strain airline finances, according to operators.
Chairman of Air Peace, Allen Onyema, has repeatedly raised concerns about the widening gap between refinery prices and what airlines ultimately pay at the point of consumption. He warned that the current pricing environment, if left unchecked, could destabilise the aviation sector, noting that local jet fuel prices have surged by as much as 300 per cent despite relatively moderate movements in international oil markets. A source at Dangote who spoke on condition of anonymity said, “This decision by Dangote is to ensure transparency and stakeholders can actually see for themselves where the alleged racketeering is coming from.”
Meanwhile, Dangote Petroleum Refinery has approved the recall of engineers previously redeployed across its business units, following what management described as a conditional pardon after internal disciplinary actions linked to operational disruptions. In an internal communication to staff, the company said the decision followed an extensive review process and numerous appeals from respected individuals, stakeholders, and the engineers. Under the directive, signed by Group Vice President of Oil & Gas, Devakumar Edwin, all affected personnel will be invited for a meeting and subsequently reassigned to resume duties at the refinery.
The recall also covers those who did not take up earlier redeployment options offered by the company. Management emphasised that the move reflects both a commitment to fairness and a belief in second chances, while reiterating that discipline, professionalism and adherence to corporate values remain non-negotiable. From an economic perspective, the aviation fuel pricing issue remains unresolved. While Dangote’s transparency initiative is welcome, the fundamental challenge of high energy costs continues to threaten the viability of domestic airlines, with potential knock-on effects on business travel, tourism, and cargo movement.
