There are strong indications that domestic airline operators in Nigeria are contemplating reducing ticket prices for passengers following the anticipated supply of aviation fuel, commonly known as Jet A1, by Dangote Refinery.
In response to sustained increases in the price of jet fuel over the past four years, indigenous carriers were compelled to adjust operations by raising ticket prices. On February 20, 2022, the 12 scheduled airlines, including Air Peace, Aero Contractors, Arik Air, and others, unanimously agreed to implement a 100% increase in airfares to offset rising operational costs.
However, with the potential for a significant decrease in the price of Jet A1 on the horizon, passengers may soon experience a decline in airfares, according to information gathered by Vanguard.
Projections indicate that the Managing Director of Aero Contractors, Captain Ado Sanusi, expressed optimism about the possibility of a price reduction in Jet A1. Sanusi highlighted the steady nature of jet fuel prices and emphasized the airlines’ anticipation of a price decrease.
Sanusi explained that the potential price drop would hinge on various factors, including the selling price of Jet A1 by Dangote Refinery. He noted that if the refinery sells below the market price, a corresponding drop in the price of aviation fuel could be expected.
However, Sanusi cautioned that the price reduction would be contingent on the cost of crude oil, refining expenses, and the consistency of supply from refineries. He emphasized that sustained supply and stable prices over several weeks or months would be necessary to have a tangible impact on airfare prices.
