Nigerian carriers dodge closure as Mideast conflict drives up petroleum costs

Nigerian airlines continued to operate flights yesterday, defying their earlier threat to shut down due to the exorbitant costs of jet fuel, which has been severely impacting the industry in Africa's largest crude producer and most populous country.

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This marks the second time in as many weeks that a potential strike has been averted, following government negotiations with airlines that have already led to a commitment to provide debt relief to carriers.

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Global crude oil prices have skyrocketed since the United States and Israel launched attacks on Iran, prompting Tehran to close the Strait of Hormuz, with prices reaching $126 per barrel yesterday, the highest level recorded since 2022.

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The sharp increase in crude oil prices has forced some European carriers to reduce their flight schedules, citing heightened costs and warnings of low fuel supply, while Nigeria has also been affected despite being a major crude producer.

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According to data from Kpler, the Dangote refinery, which has increased its production of jet fuel, has not been able to shield the country from high prices, with domestic carriers such as Air Peace, Max Air, and Rano Air operating flights yesterday despite threats from the Airline Operators of Nigeria (AON) to halt operations.

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The AON did not respond to requests for comment, while air travel has become a crucial mode of transportation in Nigeria due to the prevalence of armed groups and kidnappings, which have led many to opt for air travel over road journeys.

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The privately-owned Dangote refinery, built by billionaire Aliko Dangote, began operations in 2024 and has been refining both Nigerian and imported oil, making it vulnerable to fluctuations in the global market.

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Maritime shipments of jet fuel from the Dangote refinery averaged a record high of 154,000 barrels per day in April 2026, according to Kpler data, with about half of these shipments being exported to countries outside Africa.

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Nigeria's share of Dangote jet fuel deliveries has slightly increased, while volumes destined for other African nations have declined, according to preliminary estimates, with the refinery's exposure to global market fluctuations affecting local prices.

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Jide Pratt, Nigeria country manager for petro-trading platform Tradegrid, believes that Dangote has the capacity to reduce local jet fuel prices by prioritizing local blending, which would minimize the impact of international prices and freight costs.

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However, Pratt noted that Dangote is currently pricing its products based on international benchmarks, rather than prioritizing local sales, while Clement Isong, former TotalEnergies executive and current CEO of the Major Energies Marketers Association of Nigeria, argued that oil prices are determined by global market forces.

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Isong stated that whether Dangote refines Nigerian or imported oil, the global increase in crude oil prices would still affect local prices, as the crude oil market is a global one.

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A Dangote spokesman did not respond to requests for comment, while a spokesman for the Nigerian Midstream and Downstream Petroleum Regulatory Authority denied reports that authorities plan to cap jet fuel prices.

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Airline operators claim that fuel prices have more than tripled to N3,300 ($2.40) per liter, although fuel sellers and independent analysts dispute this figure, estimating it to be closer to N2,000 per liter.