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Aviation fuel costs hit N3,000, sparking fears of a looming airline shutdown in Nigeria by April 20. 

Nigeria’s aviation sector is facing a fresh crisis that could ground flights across the country. Domestic and foreign carriers have issued a stern warning, threatening to suspend operations by April 20. The trigger for this potential shutdown is the skyrocketing price of aviation fuel, JetA1, which has soared to nearly N3,000 per litre.

Tunji Oyebanji, the Chief Executive of Energy Advisory and former Chairman of Mobil Nigeria, sounded the alarm on Friday. He revealed that the current cost of operations is no longer sustainable for airlines. Oyebanji noted that at least one carrier may have already ceased operations, unable to cope with the financial pressure.

The crisis stems from a mix of local challenges and global instability. Oyebanji pointed to the ongoing conflict involving Iran, the US, and Israel, which has tightened global supply chains. This geopolitical tension has disrupted refining outputs in the Middle East, causing a ripple effect that has pushed crude oil prices above $100 per barrel.

A major issue for Nigerian operators is how they purchase fuel. Unlike international airlines that hedge their costs with long-term contracts, local carriers largely buy fuel on the spot at tarmacs. This practice leaves them exposed to market volatility, meaning they pay significantly higher rates whenever supply dips.

Financial constraints are also worsening the situation. Oil marketing companies view sales to domestic airlines as high-risk ventures. As a result, many marketers now insist on cash payments before supplying fuel, putting immense strain on the working capital of local airlines.

Oyebanji further explained that the Dangote Refinery is exporting a significant portion of its JetA1 production to meet international demand. While this is good for export earnings, it contributes to the tight supply situation within Nigeria. He urged airline operators to reassess their business models, criticizing the habit of hiking ticket fares during festive periods to offset losses.

Without urgent intervention, the industry faces a collapse that could disrupt travel plans for millions. Stakeholders are calling for immediate solutions to prevent a total grounding of the aviation sector.