• Government sets price ceilings after sharp rise in aviation fuel costs

• Relief measures include debt reduction and extended payment terms for airlines

• Move aims to stabilize a sector strained by rising operating expenses

Nigeria has capped the price of aviation fuel in an effort to prevent disruptions in air travel, following weeks of pressure from rising costs.

On April 28, the downstream regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), set a price range of 1,760 to 1,988 naira per liter in Lagos and 1,809 to 2,037 naira per liter in Abuja. The ceilings are based on market prices recorded between April 17 and April 23, according to an official document.

The decision is part of a broader package introduced after emergency talks with airlines and fuel suppliers. The government also granted a 30% reduction in airlines’ outstanding debts to aviation agencies and introduced a 30-day payment window for fuel purchases.

A technical committee has recommended that suppliers sell directly to airlines to cut costs and improve transparency in the supply chain. Authorities are also considering including aviation fuel in the “naira-for-crude” initiative to reduce exposure to foreign exchange volatility.

The intervention follows a more than 270% increase in jet fuel prices, which forced airlines to raise fares and consider cutting capacity. In some cases, fuel costs account for up to 40% of operating expenses, well above the global average.

The surge has been driven in part by external factors, including tensions in global energy markets linked to the conflict between the United States and Iran, as well as high procurement costs. The regulator noted that prices remain vulnerable to international volatility.

While the price cap is intended to stabilize the sector in the short term, it has raised concerns in a market that has officially been deregulated. Some industry players warn that price controls could lead to distortions, including potential shortages or the growth of informal supply channels.

In this context, ongoing discussions with Dangote Refinery over pricing premiums are seen as a key lever for achieving more sustainable cost adjustments.

Olivier de Souza