Nigeria’s state energy company will sell aviation fuel to domestic airlines at a fixed price for three months after some companies threatened to ground their fleets.
The Nigerian National Petroleum Co. agreed to supply the product to marketing firms nominated by the airlines at N480 ($1.15) a liter until August, Femi Gbajabiamila, speaker of the House of Representatives, told reporters on Monday, after a meeting in the National Assembly with the NNPC, central bank and aviation industry representatives.
The meeting took place after the Airline Operators of Nigeria, a body representing the country’s larger domestic carriers, on May 8 agreed to halt plans to ground flights due to the high cost of aviation fuel, which it said was crippling their businesses and making them unprofitable, and hold talks with government.
Despite being Africa’s largest producer of crude oil, the country currently has minimal available refining capacity, leaving it reliant on energy imports. The airlines said the cost of aviation fuel had more than tripled over the past four months to N700 per liter as Russia’s invasion of Ukraine triggered massive disruptions to energy markets.
A group for Nigeria’s biggest fuel marketing companies, however, have contested the airlines’ claims, saying that they have been selling the product for an average of N540 to N580 a liter in recent weeks. They in turn have been buying the fuel from the NNPC, even though the market is open to importers from the private sector, the Major Oil Marketers Association of Nigeria said in a statement on Monday.