Aviation Fuel Marketers Ignore Regulator Pricing Band

Oil marketers are defying the Nigerian Midstream and Downstream Petroleum Regulatory Authority by selling aviation fuel, Jet-A1, at ₦2,230 per litre. This price significantly exceeds the regulator’s suggested band of ₦1,760 to ₦1,988 in Lagos. The gap persists despite recent stakeholder negotiations intended to stabilise the market. Strong demand and an opaque supply chain, dominated by middlemen, continue to push prices upward.

While the Dangote Petroleum Refinery currently offers fuel at a gantry price of approximately ₦1,800 per litre, intermediaries are marking up costs before the product reaches airlines. Industry leaders argue that this lack of transparency allows middlemen to exploit market volatility. Operators note that fuel costs for a single flight have ballooned, with some airlines reporting a shift from ₦2.9 million to over ₦7.6 million since January. High operational costs now threaten the basic viability of domestic air travel.

The Aviation Round Table Initiative has petitioned President Bola Tinubu for an urgent sector bailout. They propose a time-bound refund mechanism to restore price parity and suggest the government contract six months of fuel supply at negotiated rates. Such measures, they argue, would provide temporary relief from the current shock. The proposal also calls for low-interest bridge loans for airlines to cover immediate liquidity gaps.

Structural reform remains the primary demand for long-term stability. Stakeholders advocate for the establishment of a National Energy Price Protection Program to mandate supply chain transparency and create a volatility buffer. There is also a push for a comprehensive audit of airport charges and levies to reduce the tax burden embedded in ticket fares. Unless these distribution bottlenecks are broken, airlines warn that ticket prices will inevitably rise further.

Regulatory guidance currently lacks the teeth to force compliance in a market-driven environment. Airlines insist that fixing the refinery-to-gantry price spread is essential to ending these artificial spikes. Without oversight of these margins, the aviation sector remains exposed to the unchecked activities of intermediaries. The federal government must now decide if the current market approach is sustainable.