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Aviation fuel sold for ₦1,800 per litre across much of Nigeria on Friday, an 80 percent jump in two weeks that has left domestic carriers hemorrhaging money on every flight while they delay passing costs to passengers already squeezed by an economy that offers few breaks.
The spike—from roughly ₦1,000 per litre in late February—reflects turbulence in global energy markets triggered by the Middle East war, which has pushed crude prices higher and disrupted supply chains that feed refineries worldwide. For airlines operating on margins that rarely leave room for error, the sudden increase has turned profitability into fantasy.
Prof Obiora Okonkwo, spokesperson for the Airline Operators of Nigeria, told Channels Television that carriers are absorbing losses rather than immediately adjusting fares, a decision driven by reluctance to worsen burdens on travelers navigating Nigeria’s economic headwinds.
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“We are not in a business where you can easily adjust your ticket price,” Okonkwo said. “Right now what we are doing is that we are bleeding. We are taking the blow. We are selling tickets at very non-profitable prices. We are losing a lot of money.”
Aviation fuel accounts for 30 to 35 percent of total operating expenses for airlines, the single largest cost component in an industry where equipment, maintenance, insurance and crew salaries leave little flexibility when one variable swings wildly. The ₦800-per-litre increase has effectively wiped out whatever slim returns operators had projected for the quarter.
How long carriers can sustain that strategy remains uncertain. Okonkwo warned that adjustments might come soon if prices do not retreat, though he emphasized sensitivity to passengers’ financial constraints.
“Obviously, adjustments will be expected anytime soon. But again, we are very sensitive to the economic situation of Nigerians and our travellers,” he said.
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Some relief could come from recent releases of reserve crude oil globally, moves designed to ease price pressure as Iran’s closure of the Strait of Hormuz chokes off roughly one-fifth of oil flows. Whether those releases will translate quickly enough to Nigerian fuel markets to spare airlines from fare increases is unclear.
Okonkwo urged the federal government to engage with the Dangote Refinery as part of efforts to stabilize local supply. The facility began commercial operations in recent months after years of delays, offering Nigeria its first major domestic refining capacity in decades.
“We were more hopeless in a situation where there was no refinery in Nigeria in the last two years,” he said. “Now that we have a refinery, we are hopeful that we can find a solution around it.”
Whether the refinery can produce aviation-grade fuel at volumes and prices that help carriers depends partly on procurement arrangements and partly on whether global crude costs allow competitive pricing. The facility sources feedstock at international benchmarks plus a premium, meaning its output tracks global swings even when refined domestically.
If the spike persists, some airlines may struggle to continue absorbing fuel costs that have ballooned beyond what budgets anticipated, Okonkwo said. Carriers already operating on thin reserves could face decisions about suspending routes, reducing frequencies or grounding aircraft until conditions improve.
The Airline Operators of Nigeria also responded to sanctions threatened by the Federal Competition and Consumer Protection Commission against roughly five airlines over alleged price fixing. Okonkwo rejected the premise, saying the aviation sector operates under deregulation that makes coordinated pricing unlikely.
“There is no meeting of airlines where they agree to fix prices,” he said. “Fixing prices would mean operating as a cartel, and that is not the case.”
Ticket pricing varies widely because different aircraft types carry different operating costs, he explained. Each airline sets fares based on its own expense structure, equipment and route networks.
Airlines must also demonstrate financial viability to regulators as a condition of maintaining operating licenses, Okonkwo noted. He urged authorities to consider the industry’s fragility when making policy decisions that affect carriers.
“At every point in time, you must prove to the regulators that you are financially viable and capable of sustaining operations,” he said.
The regulatory threat adds pressure to airlines already navigating fuel cost volatility, foreign exchange shortages and infrastructure gaps that drive expenses higher than in markets where airport fees, maintenance costs and logistics run more efficiently.
Nigeria’s aviation sector has cycled through boom-and-bust patterns for years, with carriers launching amid optimism only to collapse under operational strain. Survivors operate with minimal buffers, making sudden cost shocks existential threats rather than manageable challenges.
