Nigerian airlines will suspend all flight operations from April 20, they have warned, unless crippling jet fuel prices, which they accused the country’s fuel marketers of artificially inflating, are reduced.
The Airline Operators of Nigeria, an industry body grouping around a dozen mainly domestic carriers, wrote to the Major Energies Marketers Association of Nigeria on April 14, complaining that jet fuel prices had risen by about 270% since late February.
Global oil and fuel prices have surged since the onset of the Iran war, as the conflict severely hinders shipping through the critical Strait of Hormuz.
But in the letter seen by Reuters, AON called the jet fuel increase in Africa’s most populous nation “astronomical and artificial,” saying it far outpaced global crude oil prices.
“Currently, airline revenues are insufficient to cover the cost of fuel alone,” it said.
MEMAN did not immediately respond to a request for comment.
Soaring jet fuel prices have upended the global aviation industry, forcing airlines to raise fares, curb growth plans and rethink forecasts.
AON said that raising ticket prices to reflect the fuel costs airlines are facing in Nigeria could lead to low passenger numbers, while a shutdown of airline operations would have broader repercussions, hurting banks, costing jobs and worsening insecurity.
Jet fuel typically accounts for 30% to over 40% of African airlines’ operating costs, compared with a global average of 20% to 25%, according to the African Airlines Association, making them particularly vulnerable to price surges.
Nigeria’s aviation sector consumed about 2.1 million litres of jet fuel per day last month, data from the country’s petroleum products regulator showed.
At the same time, data from tanker-tracking firm Kpler showed Nigeria’s exports of clean petroleum products – gasoline, diesel, kerosene and jet fuel – more than doubling month-on-month in March.
Dangote did not immediately respond to a request for comment.
REUTERS
