There are emerging indications that ticket prices by domestic airlines in Nigeria may soon experience a significant reduction due to the anticipated commencement of aviation fuel supply by Dangote Refinery.
This development comes as a relief to both operators and passengers who have been grappling with surging ticket costs driven by the high price of Jet A1 fuel.
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, including Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet and United Nigeria Airlines, on February 20, 2022, jointly agreed to increase airfares by 100 per cent to meet up with operational costs.
However, with operators looking at a possible crash in the price of Jet A1, passengers might experience a drop in airfares.
The Managing Director of Aero Contractors, Captain Ado Sanusi, told Vanguard that although the price of Jet A1 had been steady, airlines would appreciate a price decrease.
Sanusi said, “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.
”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.”
On whether the imminent supply could result in a price drop, he added: “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. Meanwhile, it is dependent on what crude oil is being sold to him and how much it costs him to refine. 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.”