Oil and Gas
Fuel Crisis Deepens: Nigerian Airlines Threaten Shutdown Amid Price Spike
Nigeria’s aviation sector is facing mounting pressure as a jet fuel crisis drives up operating costs for local airlines, even as the situation boosts profits for the Dangote Refinery.
The crisis, triggered by global supply disruptions linked to the ongoing Iran conflict, has sent jet fuel prices soaring worldwide. In Nigeria, the impact has been particularly severe, with aviation fuel prices nearly tripling to about ₦3,300 per litre, placing intense financial strain on domestic carriers.
Fuel accounts for as much as 40% of airline operating costs in Africa, and Nigerian operators have warned they may be forced to suspend flights if prices remain elevated.
Paradoxically, the same crisis is proving highly profitable for Dangote’s refinery, which has emerged as a major supplier of jet fuel both locally and internationally. Since ramping up operations in 2026, the refinery has been producing millions of litres of aviation fuel daily, with a significant portion exported to Europe where demand has surged amid shortages.
Analysts say the refinery is capitalising on stronger margins abroad, where prices are higher, even though it continues to supply Nigerian airlines. Reports indicate that while about 2.1 million litres per day are sold domestically, a larger share of its output is shipped overseas to maximise profits.
The situation highlights a key challenge in Nigeria’s deregulated fuel market, where increased local production does not necessarily translate into lower prices for consumers. Despite the presence of Africa’s largest refinery, airlines are still exposed to global price swings driven by geopolitical tensions and supply constraints.
In response to the growing crisis, the federal government has stepped in with relief measures, including debt concessions for airlines and urgent negotiations with fuel marketers to stabilise prices.
Industry experts warn that unless structural issues in pricing and supply are addressed, Nigeria’s aviation sector could face reduced flight operations, higher ticket fares, and potential job losses. At the same time, Dangote’s refinery is expected to further strengthen its position as a global fuel supplier, especially as Europe and other regions continue to grapple with shortages.