Airfares May Rise As Aviation Fuel Hits N1,835/L

Airlines in Nigeria are facing mounting operational pressures as the price of aviation fuel continues to surge, with Jet A1 now selling at N1,835 per litre in Kano, N1,820 in Abuja, N1,815 in Port Harcourt, and N1,780 in Lagos.

Industry experts warn that the steep fuel costs are likely to translate into higher airfares, potentially reducing passenger traffic, especially for leisure travel.

According to the spokesman, Airline Operators of Nigeria, (AON) Prof. Obiora Okonkwo, the increase in the cost of aviation fuel could push an upward review of the air fare after consideration by the regulatory-Nigeria Civil Aviation Authority (NCAA).

“As regards to us Nigeria, before the war we were getting aviation fuel at about N1000 a litre, just plus minus and as we speak right now, the last fuel we had this evening was going for about N1800.

“We’re still battling how to deal with it. There are rules. Most of the airlines from the rule regulatory requirement should submit their inventory to NCA, which is a regulatory body, for any price change for anything not less than two weeks before implementation.

“So I guess in this inventory by some of the member airlines of the airline, they would have had some rates or fares submitted quite a long time ago. Now, the bigger challenge we are having here is that this is really not the highest season for air travelers. Even after Christmas, you usually have a great dive to about 40 to 60 percent airpax load,” he said in an interview with Arise TV.

He described the increase as quite astronomical, saying it was inevitable due to the war.

“Obviously it has been a worldwide phenomenon and when the whole world woke up to that world that started a few days ago, no doubt that it was very predictable that anything that happens in Iran will definitely have an effect on the oil price.

“So aviation is very vulnerable. It’s one business that even the weather affects and when it does, obviously all the other factors are changed immediately,” he said.

Aviation analyst Capt Samuel Caulcrick explained that the sharp rise in Jet A1 prices is closely linked to Nigeria’s dependence on the dollar for petroleum transactions, despite the local production of fuel.

“If not for the dollar, the Jet A1 you are talking about would be around ₦900,” Caulcrick said, noting that both suppliers and refiners, including the Dangote Refinery, must exchange naira proceeds into dollars to purchase crude oil at international market rates. “Even crude from Nigeria is sold at the dollar rate. To restock, operators must buy in dollars; otherwise, they risk going out of business.”

Caulcrick highlighted that the Federal Government, through the Central Bank of Nigeria (CBN), has been intervening to prevent the naira from depreciating too quickly. He noted that without intervention, the naira could have fallen to N1,000 to the dollar, further escalating aviation fuel prices.

“The high cost of fuel will translate into higher ticket prices,” he said, adding, “Business travellers may not be affected, but leisure travellers will feel the pinch. Lower affordability could reduce seat occupancy and strain airline revenues.”

The analyst urged the CBN to implement measures that would stabilise the naira, explaining that a stronger currency would reduce the cost of dollars in the market and, by extension, aviation fuel prices. (Daily trust)