There are promising signs that ticket prices for domestic flights in Nigeria could witness a significant decrease soon, owing to the anticipated commencement of aviation fuel supply by Dangote Refinery.
This development comes as a relief to both airline operators and passengers who have been grappling with soaring ticket costs driven by the high price of Jet A1 fuel.
Over the past four years, the escalating cost of jet fuel has compelled indigenous carriers to hike ticket prices to sustain their operations.
However, the introduction of Dangote Refinery into the aviation fuel market is expected to stabilize and potentially lower the cost of Jet A1, providing a more cost-effective fuel source for domestic airlines.
The 12 scheduled airlines in Nigeria, including Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet, and United Nigeria Airlines, jointly agreed on February 20, 2022, to increase airfares by 100 per cent to meet operational costs.
However, with operators anticipating a possible drop in the price of Jet A1, passengers might experience a reprieve in airfares.
Managing Director of Aero Contractors, Captain Ado Sanusi, expressed that while the price of Jet A1 has remained steady, airlines would welcome a decrease in price.
He stated, “As operators, we have no idea of the refinery where marketers buy Jet A1, but what we look at is the price. If the price drops, whether it is from Dangote refinery or refineries outside the country, we will appreciate it.”
Sanusi further elaborated, “The price has been steady, and that is what we use in making our projections. The price of jet fuel has been between an average price of N1,200 and N1,400 per litre.”
Regarding the potential impact of the imminent supply on airfare, he commented, “It depends on what price Dangote refinery sells Jet A1. If it sells below the market price, then, of course, it would drop price. However, if it is not selling below the market price, there won’t be a drop in price.”
Sanusi emphasized the importance of consistent supply and stable prices, stating, “What we think will bring down the price of Jet A1 is the cost of freight. If Port Harcourt, Warri, and Dangote refineries could give us enough jet A1 for some time and we have steady prices, it will definitely have an impact on price. However, that won’t be possible in a few days. It has to be consistent for a few weeks and even months.”
