• Dangote refinery begins direct jet fuel supply to Ethiopian Airlines

• High fuel costs strain African airlines, exceeding global averages

• Limited short-term impact; refining and distribution capacity must expand

The Dangote refinery has begun delivering jet fuel directly to Ethiopian Airlines, according to local media citing Chief Executive David Bird. The development comes amid mounting pressure on global fuel markets.

 The move is part of a broader push to strengthen energy independence among African carriers, which still import most of their jet fuel at costs often at least 17% above the global average — a gap that predates recent price pressures. According to the African Airlines Association (AFRAA), fuel accounts for between 30% and 40% of operating costs for the continent's carriers, compared with a global average of between 20% and 25%. That structural burden weighs heavily on the competitiveness of the local aviation industry.

In Nigeria, data from the National Bureau of Statistics highlight the market's volatility. The country imported 31 billion naira (approximately $22.5 million) worth of jet fuel in the first quarter of 2024, an 87% decline from 239.18 billion naira in the fourth quarter of 2023.

At the same time, the Dangote refinery has an estimated production capacity of 24 million liters of jet fuel per day, far exceeding Nigeria's domestic demand of around 2.1 million liters daily. However, a large share of that output is being shipped to Europe, according to Reuters, where demand is rising ahead of the summer season.

 That export orientation stands in contrast to the strains observed on the Nigerian domestic market, where the local aviation industry recently came close to a standstill amid a sharp rise in jet fuel prices.

Carriers grouped under the Airlines Operators of Nigeria said prices had risen by roughly 300%, climbing from 900 naira to 3,300 naira per liter, even as international prices rose by about 30%. The situation prompted authorities to impose a price cap in late April, which helped ease tensions.

While the direct deliveries to Ethiopian Airlines are seen as a positive signal and a potential catalyst for reducing the carrier’s reliance on imports, as well as for other African airlines in the future, several analysts say the impact will remain limited in the near term. To support an African air transport market whose annual growth is estimated at 5.7% through 2034, the continent will need to significantly expand refining and local distribution capacity.

Henoc Dossa