Dangote Petroleum Refinery & Petrochemicals has announced a reduction in the price of aviation fuel (Jet A1) to N1,650 per litre, down from N1,750 per litre. This strategic adjustment is intended to alleviate cost pressures on airlines and guarantee a consistent fuel supply across Nigeria.
In addition to the price cut, the refinery is introducing a 30-day interest-free credit facility for marketers and airline operators, supported by bank guarantees. The pricing model has also transitioned from being dollar-denominated to a naira-based system.
These interventions come at a critical time, as domestic carriers face mounting operational costs, with aviation fuel being a significant expense. Industry players have previously voiced concerns that the rising cost of Jet A1 was placing severe financial strain on operators and jeopardizing flight operations.
The refinery's decision is anticipated to provide much-needed relief to airline operators by lowering their fuel procurement expenses. This is expected to enhance operational stability and contribute to moderating airfares for passengers.
The refinery stated that these initiatives are designed to strengthen Nigeria’s aviation value chain and reduce the financial burden on operators who are already contending with elevated operating costs. Several domestic carriers had previously warned that high Jet A1 prices could necessitate route adjustments, flight reductions, and further fare increases.
The reduction in ex-depot pricing is expected to improve airline cash flow and potentially lead to more stable ticket prices on domestic routes. The Federal Government has also been actively working to stabilize the aviation sector amidst concerns over potential disruptions due to rising fuel prices.
In April, the Nigerian Midstream and Downstream Petroleum Regulatory Authority reportedly engaged with airline operators, fuel marketers, and other stakeholders to prevent a fuel supply crisis. Proposals from these discussions included capping jet fuel prices and providing credit support for airlines facing liquidity challenges.
