Nigeria Intervenes to Cap Jet Fuel Prices as Soaring Costs Threaten to Ground Airlines
Lagos, April 29, 2026 — Nigeria’s government has moved to cap jet fuel prices and extend credit facilities to airlines, in a bid to head off a full-scale crisis that had threatened to halt flights and cripple the country’s aviation sector, according to a government document released this week.
The intervention follows emergency talks convened after airlines warned that jet fuel costs had jumped by more than 270 percent, forcing fare increases and raising the prospect of capacity cuts that would have left thousands of passengers stranded. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) set indicative price caps of 1,760 to 1,988 naira ($1.29–$1.46) per litre in Lagos and 1,809 to 2,037 naira in Abuja, based on benchmarks from April 17–23.
The measures include a 30-day credit window allowing airlines to purchase fuel on deferred payment terms, a debt mediation mechanism between operators and oil marketers, and increased transparency requirements for the aviation fuel supply chain.
A Sector on the Brink
The crisis had been building for months, driven by a combination of global oil market turbulence — linked to the ongoing U.S.–Iran conflict and associated supply disruptions — and structural inefficiencies in Nigeria’s domestic fuel distribution network. Airlines had repeatedly warned that fuel costs had become unsustainable, with some carriers threatening to suspend operations entirely.
President Bola Tinubu approved a 30 percent relief on airlines’ debts to aviation agencies last week, and directed the NMDPRA, aviation ministry, fuel marketers, and airline representatives to reach agreement on a fair fuel price within 72 hours. The talks produced the price cap framework and credit arrangements now being implemented.
A technical committee established during the negotiations also recommended that fuel marketers sell directly to airlines within the indicated price range to reduce intermediary costs. It also urged engagement with the Dangote Petroleum Refinery — which has become a central player in Nigeria’s fuel supply picture — over recently increased premiums applied to international benchmarks used to price jet fuel.
Currency and Supply Challenges
One of the underlying issues complicating Nigeria’s aviation fuel market is foreign exchange exposure. Many fuel suppliers price their products against international benchmarks denominated in dollars, creating currency risk for airlines operating primarily in naira. The technical committee has recommended exploring whether jet fuel could be incorporated into Nigeria’s naira-for-crude initiative to limit this exposure.
The committee also wants to validate airside fuel distributors to ensure they have adequate infrastructure — a reform that could reduce the number of authorised suppliers at airports but improve quality and price consistency.
Dangote Refinery in the Frame
The Dangote Petroleum Refinery, which reached full production capacity of 650,000 barrels per day in 2025, has become a significant force in Nigeria’s energy sector. However, the committee’s recommendation to engage Dangote over pricing premiums signals that the relationship between the refinery and airlines remains a work in progress. Aviation fuel suppliers have cited Dangote’s pricing policies as a factor driving up costs, though the refinery’s operators maintain they are operating within market parameters.
Despite the interventions, the NMDPRA has warned that prices could still rise due to continuing market volatility linked to the Middle East conflict. The global oil market remains under pressure from supply disruptions, and any further escalation could undo the government’s efforts to stabilise aviation fuel costs.
For now, Nigerian airlines have received temporary relief through the credit window and price caps. Whether these measures are sufficient to prevent future disruptions will depend on global oil price movements and the willingness of domestic suppliers to work within the framework agreed in the emergency talks.
— Image: Aircraft at Lagos airport — Wikimedia Commons