The Federal Government of Nigeria has directed fuel marketers to sell aviation fuel on credit to airline operators, aiming to mitigate the impact of a worsening jet fuel crisis on the country's aviation sector.
Government Intervention Details
The directive, announced through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), requires marketers to provide airlines with a 30-day credit window and ensure direct supply of Jet A1 fuel to operators. This move is designed to ease immediate cash flow pressures on airlines, allowing them to continue operations while deferring payment.
Rising Jet Fuel Prices
Jet fuel prices have surged sharply in recent months, in some cases exceeding ₦3,000 per litre. This has placed significant financial strain on domestic airlines already grappling with rising operational costs and fluctuating passenger demand. Industry stakeholders warn that prolonged high fuel costs could force weaker airlines out of the market and reduce competition.
Direct Sales to Cut Intermediaries
In addition to the credit facility, the mandate for direct sales from marketers to airlines aims to cut out intermediaries, improve supply efficiency, and potentially reduce additional costs within the distribution chain. The Minister of Aviation and Aerospace Development, Festus Keyamo, has been engaging with industry players to find short-term solutions to stabilise the sector and prevent a shutdown of operations.
Broader Concerns and Expert Analysis
While the government's intervention has been welcomed by some operators, analysts caution that it may only provide temporary relief. Questions remain about how marketers will manage delayed payments and whether the policy could distort the deregulated fuel market. The situation also highlights deeper structural challenges, including Nigeria's reliance on imported aviation fuel and exposure to global oil price volatility.
As authorities continue discussions with airlines and fuel suppliers, the focus remains on preventing disruptions and stabilising ticket prices for passengers. The crisis has raised broader concerns about the sustainability of Nigeria's aviation industry, with experts warning that without sustained intervention, the sector could face severe challenges.
