Nigerian airlines threaten to halt flights from April 20 amid high jet fuel costs

Nigerian airlines will suspend all flight operations from April 20 unless jet fuel prices are reduced, the Airline Operators of Nigeria (AON) said on Thursday.

The industry body, composed of around a dozen mainly domestic carriers, wrote to the Major Energies Marketers Association of Nigeria (MEMAN) on April 14, complaining that jet fuel prices had risen by about 270% since late February.

In the letter seen by Reuters, AON called the jet fuel increase in Africa's most populous nation "astronomical and artificial," saying it far outpaced global crude oil prices.

'Insufficient to cover fuel costs'

"Currently, airline revenues are insufficient to cover the cost of fuel alone," the letter said.

Soaring jet fuel prices have upended the global aviation industry as a consequence of the Iran war, forcing airlines to raise fares, curb growth plans and rethink forecasts.

But African airlines are particularly vulnerable, as jet fuel typically accounts for between 30% and 40% of their operating costs, compared with a global average of 20% to 25%, according to the African Airlines Association.

MEMAN disputed the airlines' figures in a response to the AON seen by Reuters, saying the quoted price was more than 40% above a survey-based market average, adding that jet fuel distribution involves specialised equipment and handling that make it more cost-intensive.

More than 2 million litres daily

AON said that raising ticket prices to reflect the fuel costs airlines are facing in Nigeria could reduce passenger numbers, while a shutdown of airline operations would have broader repercussions, including job losses.

Nigeria’s aviation sector consumed about 2.1 million litres of jet fuel per day last month, data from the country's petroleum products regulator showed.

However, Dangote ‌Petroleum Refinery – Nigeria's sole domestic jet fuel producer – made no deliveries to the domestic market in March, the data showed.

At the same time, data from tanker-tracking firm Kpler showed Nigeria's exports of clean petroleum products – petrol, diesel, kerosene, and jet fuel – more than doubled month-on-month in March.