Middlemen Defy Regulator's Pricing Band, Hike Jet A1 Fuel Price to N2,230/Litre

The Nigerian aviation sector is grappling with persistently high operating costs, primarily driven by the exorbitant price of aviation fuel, Jet A1. Despite advisories from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), oil marketers are flouting the recommended pricing band, selling the crucial commodity at N2,230 per litre and above. This defiance deepens concerns across the industry, threatening stability and potentially impacting air travel costs for Nigerians.

The NMDPRA had previously suggested a price range of N1,760 to N1,988 per litre in Lagos and around N2,037 in Abuja, following extensive stakeholder consultations. However, market realities show a stark divergence, with airlines bearing the brunt of significantly inflated prices. Investigations reveal that strong demand, coupled with the activities of numerous intermediaries aiming to maximize their profit margins, are key factors sustaining these elevated costs. The complex supply chain, often involving multiple middlemen between the depot and the end-users, continues to exert upward pressure on the final price.

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Currently, there is lack of transparency in jet fuel pricing, Dangote Refinery should as a matter of urgency publish its daily jet fuel gantry prices, this would erode abnormal margins by middlemen and help save artificial hike of Jet fuel that is about to cripple businesses in Nigeria’s in Nigeria’s aviation sector.

Even with the Dangote Petroleum Refinery offering commercial stock at a gantry price of approximately N1,800 per litre, the markups by intermediaries are substantial, pushing prices well beyond the regulator's guidance. This situation highlights ongoing inefficiencies within the distribution network and raises serious questions about the effectiveness of regulatory oversight in a sector that is largely market-driven. Industry stakeholders warn that without addressing these supply bottlenecks and arbitrage opportunities, airlines will continue to face unsustainable operating costs, which could inevitably translate to higher ticket prices and broader instability within the aviation ecosystem.

From a Nigerian perspective, this issue is not merely an economic inconvenience; it strikes at the heart of connectivity and commerce. The aviation sector is vital for business, tourism, and national integration. When operational costs skyrocket due to what appears to be market manipulation and regulatory shortcomings, it impacts everyone. The call for transparency, particularly from sources like Petroleumprice.ng, urging refineries to publish daily prices, is a direct response to the frustration felt by operators and consumers alike. The current situation risks crippling businesses and hindering the growth of an industry crucial to Nigeria's development.

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It’s not a controlled market, it’s a free market; so, they, NMDPRA, cannot fix prices. Rather, from their own findings, from their o