Jet Fuel: Nigeria Sets Price Caps to Protect Air Travel Sector

Nigeria has imposed a price cap on aviation fuel to prevent widespread disruptions to air travel following weeks of intense pressure from rising costs. On 28 April, the Nigerian Midstream and Downstream Petroleum Regulatory Authority set a price range of 1,760 to 1,988 naira per litre in Lagos and 1,809 to 2,037 naira per litre in Abuja.

These ceilings are based on market prices recorded earlier in the month and aim to stabilise a sector currently strained by high operating expenses.

The decision is part of a broader support package introduced after emergency talks between the government, airlines, and fuel suppliers. In addition to the price caps, the government granted a 30% reduction in the outstanding debts that airlines owe to aviation agencies. A new 30-day payment window for fuel purchases has also been established to improve liquidity within the industry.

A technical committee has recommended that suppliers sell fuel directly to airlines to lower costs and increase transparency.

Authorities are also considering including aviation fuel in the "naira-for-crude" initiative to help protect the sector from foreign exchange volatility. These measures follow a price surge of more than 270%, which has forced many carriers to increase fares and consider reducing their flight capacity.

The surge in jet fuel prices has been driven by external factors, including tensions in global energy markets linked to the conflict between the United States and Iran. The regulator noted that prices remain vulnerable to international volatility, with fuel currently accounting for up to 40% of airline operating costs.

While the caps provide short-term stability, some industry participants expressed concern that price controls could lead to market distortions or potential fuel shortages.