Nigeria Caps Aviation Fuel Prices After Sharp Cost Surge

Nigeria has introduced price ceilings on aviation fuel to prevent disruptions in air travel after a sharp rise in costs. The move targets a sector already under strain from higher operating expenses.

On April 28, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) set fuel price ranges of 1,760 to 1,988 naira per litre in Lagos and 1,809 to 2,037 naira per litre in Abuja. These benchmarks reflect market prices recorded between April 17 and April 23.

The price cap forms part of a broader relief package agreed after emergency talks with airlines and fuel suppliers. The government approved a 30% reduction in airlines’ outstanding debts to aviation agencies and introduced a 30-day payment window for fuel purchases to ease cash flow pressure.

Supply Reforms and Cost Pressures

Regulators are also considering structural changes in the supply chain. A technical committee has proposed direct sales from suppliers to airlines to cut costs and improve transparency. Authorities are further reviewing whether aviation fuel can be included in the “naira-for-crude” programme to reduce exposure to foreign exchange volatility.

The intervention follows a surge of more than 270% in jet fuel prices, which has forced airlines to raise fares and review capacity. Fuel now accounts for as much as 40% of operating costs in some cases, well above global averages.

Market Risks and Long-Term Outlook

Rising prices have been driven partly by global factors, including tensions in energy markets linked to the United States–Iran tensions, alongside high procurement costs. The regulator noted that prices remain sensitive to international volatility.

While the cap is intended to stabilise the sector in the short term, it has raised concerns in a deregulated market. Some industry players warn that price controls could distort supply, potentially leading to shortages or informal distribution channels. In this context, ongoing discussions with the Dangote Refinery are seen as key to achieving more stable and sustainable pricing.