Good News As Dangote Refinery Slashes Aviation Fuel Price by N100
- Dangote Petroleum Refinery has reduced the price of jet fuel, giving hope for lower ticket prices by airlines
- The earlier increase in prices for aviation fuel was primarily due to rising global crude oil prices
- The latest price cut is part of an effort to ease pressures on operational costs in the aviation sector
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The price for aviation fuel (Jet A1) has dropped to N1,650 per litre at Dangote Petroleum Refinery.
The new rate represents a N100 or 5.71% reduction from the previous price of N1,750 per litre and is expected to provide relief for airline operators struggling with rising operating costs.
Source: UGC
The refinery, in a statement on Monday, May 18, disclosed that the latest price cut is part of broader interventions aimed at supporting marketers and airline operators amid rising industry costs.
The company said the reduction is accompanied by a 30-day interest-free credit facility backed by bank guarantees for marketers and airline operators, Punch reports.
Aviation fuel, commonly referred to as Jet A1, accounts for the largest percentage of operating expenses for airlines and affects the cost of flight tickets and operations.
Relief for airlines
The refinery also announced a transition from a dollar-denominated pricing structure to a naira-based model aimed at reducing foreign exchange pressure on operators.
The changes will come as a huge relief for airlines, who have consistently expressed that spiralling jet fuel prices have been causing considerable financial burdens for local carriers and airline operations in the country.
Airline Operators of Nigeria revealed that Jet A1 prices rose from roughly N900 per litre pre-conflict to between N2,700 and N2,900 per litre, with some outlets reportedly selling the product at as high as N3,300 per litre.
Source: Getty Images
Also, Chairman and Chief Executive Officer of Air Peace, Allen Onyema, complained that the pricing trend ,raises serious questions about transparency and pricing discipline among fuel distributors, BusinessDay reports.
He said:
“The truth is that marketers must be called to account to explain how prices rose by as much as 300%, even when Dangote’s supply remains the cheapest and some of them source directly from the refinery."
While this latest Dangote judgment should appease the aviation sector, the price reductions could still be susceptible to volatility on the global oil market, as the threat hangs over supply due to political instability.
Senate unhappy with rising airfares
Legit.ng earlier reported that the Senate has invited the Minister of Aviation and Aerospace Development, Festus Keyamo, alongside key aviation agencies and airline operators, to an emergency meeting over the sharp rise in domestic airfares.
The lawmakers said the current pricing trends were “unacceptable” and risked putting air travel out of the reach of many Nigerians.
According to the Senate, fares on routes such as Abuja–Lagos, Abuja–Enugu and Abuja–Ilorin have climbed to between N400,000 and N650,000.
Source: Legit.ng
