Dangote Petroleum Refinery has reduced the ex-depot price of its aviation fuel, also known as Jet A1, to ₦1,650, down from ₦1,750 per litre, giving relief to airlines, passengers and Nigeria’s aviation sector generally.
Other packages offered by the refinery include a 30-day interest-free credit facility for marketers and airline operators, backed by bank guarantees, and a shift from dollar-denominated pricing to a naira-based payment structure.
Group Chief Branding and Communications Officer of Dangote Group, Mr Anthony Chiejina, disclosed this in a statement on Monday.
The price reduction comes at a time when aviation fuel has recorded an unprecedented price hike in the country and significantly affecting the operational costs for domestic airlines. With aviation fuel accounting for almost 50 per cent of operating costs, airlines had threatened to ground domestic flights if nothing urgent was done about the situation.
The Price Spike
Domestic airline operators under the umbrella of Airline Operators of Nigeria (AON) had, in April, raised concerns about the aviation fuel supply crisis and its impact on their operations. According to the operators, aviation fuel rose to between ₦2,700 and ₦3,300 per litre, from about ₦900 earlier in the year.
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Industry stakeholders have cautioned that continued increases in aviation fuel costs could create financial pressure for operators and threaten the viability of flight operations.
The fuel price hike was attributed to the global energy market disruptions caused by the ongoing hostilities in the Middle East involving the United States, Israel and Iran. The disruption of the Strait of Hormuz (a key sea route for the global supply of oil and gas) pushed up oil prices above $100 per barrel, causing a significant surge in fuel prices in domestic markets.
Pinnacle Daily reports that some domestic airlines have suspended flight operations on some routes and also reduced flight frequencies due to aviation fuel supply challenges in the country.
Dangote Refinery said the ₦100 per litre reduction is expected to immediately lower the cost of refueling for airlines.
The 30-day interest-free credit facility gives operators more flexibility in managing their finances, allowing them to pay for fuel after using it.
This decision is expected to provide relief to airline operators by lowering fuel procurement costs, improving operational stability, and supporting efforts to moderate airfares,” the refinery stated.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X