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Two-year refining milestone: Fuel import spending crashes 54% to $6.7bn

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The amount spent on the importation of refined petroleum products has dropped sharply by 54 per cent in two years, falling from $14.58bn in the first nine months of 2023 to $6.71bn in the corresponding period of 2025, according to data from the Central Bank of Nigeria’s Balance of Payments report.

It declined from $14.58bn in the first nine months of 2023 to $11.38bn in the corresponding period of 2024, before dropping further to $6.71bn within nine months of 2025.

This is according to a comparative analysis of the 2023 and 2024 full-year and the Q3 2025 Balance of Payments presentation, released by the CBN and reviewed by The PUNCH on Monday.

The figures obtained from the CBN documents showed a sustained moderation in fuel importation, with import bills declining year-on-year over the period under review.

The data revealed that Nigeria spent $11.38bn on refined petroleum product imports between January and September 2024, representing a $3.20bn or 21.9 per cent decline compared with $14.58bn recorded in the same period of 2023, pointing to a sharp contraction in foreign exchange outflows associated with refined petroleum products.

The downward trend accelerated in 2025, with fuel imports dropping further by $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year, marking the steepest year-on-year contraction in the period analysed.

Overall, the figures show that Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 than it did in the corresponding period of 2023, underscoring a significant easing of foreign exchange outflows linked to petroleum product imports.

The CBN data also showed a 41 per cent year-on-year decline in refined petroleum product imports by the third quarter of 2025, signalling early signs of import substitution as new and rehabilitated refineries scale up operations.

The PUNCH reports that Nigeria’s reduced foreign exchange spending on imports comes against the backdrop of a series of structural reforms and market adjustments aimed at easing pressure on the country’s external reserves and stabilising the naira.

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For decades, Nigeria relied heavily on imports, particularly refined petroleum products, due to limited domestic productive capacity, weak industrial output, and chronic underinvestment in critical infrastructure. This dependence made import financing one of the largest drains on foreign exchange earnings.

The removal of petrol subsidies in 2023 marked a major turning point, as higher pump prices curbed fuel consumption and reduced arbitrage-driven demand. The policy shift, combined with stricter foreign exchange management by the Central Bank of Nigeria, helped moderate import volumes and limit speculative FX demand linked to fuel importation.

Another key factor has been the gradual expansion of domestic supply, especially in the downstream oil sector. Energy experts also say competition within the market has intensified as marketers struggle to compete with supply from the $20bn Dangote Petroleum Refinery in Lekki.

Despite the decline, Nigerian fuel-importing marketers still spent an estimated $6.71bn importing refined products during the review period, underscoring the country’s continued dependence on foreign fuel supplies, despite repeated assurances that domestic refining would significantly curb imports.

Although the quarterly fuel import bill declined consistently, the data highlighted persistent structural weaknesses in the downstream oil sector.

Experts speak

Commenting, renowned energy economist Professor Wumi Iledare, noted that Nigeria’s reliance on imported petrol has declined but has not been eliminated. He also warned against claims that fuel importation has ended following increased domestic supply from the Dangote Petroleum Refinery.

In a personal note titled “Dangote Refinery, Petrol Imports, and Market Reality,” Iledare said recent assertions that Nigeria no longer imports petrol reflect “understandable optimism” but overstate the economic reality of the downstream oil market.

“Recent claims that petrol importation into Nigeria has ended because Dangote Refinery now meets domestic demand reflect understandable optimism, but they overstate economic reality.

“Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal reliance on imported petrol. However, neither Dangote Refinery nor petroleum marketers determine national supply outcomes,” he said.

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Iledare, who also serves as Executive Director of the Emmanuel Egbogah Foundation, Abuja, acknowledged that the Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal dependence on imported petrol.

However, he stressed that neither the refinery nor petroleum marketers determines national supply outcomes. According to him, Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are shaped by the option to import, rather than the physical presence of imported cargoes.

“Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are disciplined by the option to import, not merely the act of importing.

“Even when no petrol cargoes are landing, the credible threat of imports remains the market anchor. Importation also continues to serve as a risk-management tool for stock security, demand surges, logistics disruptions, and refinery operational risks,” Iledare said, adding that importation continues to function as a risk-management tool for stock security, demand surges, logistics disruptions and refinery operational risks.

The energy economist further noted that the Petroleum Industry Act entrenches liberalisation and competition in the downstream sector, leaving no room for discretionary declarations that petrol imports have ended.

“The PIA does not permit discretionary declarations that imports have ended. Sustainable price stability and energy security arise from market discipline, infrastructure efficiency, foreign exchange liquidity and regulatory credibility, not announcements,” he said.

Iledare argued that the appropriate policy narrative should focus on reduced marginal import dependence, rather than import elimination, warning that imprecise language could undermine policy credibility.

“The correct policy framing, therefore, is reduced marginal import dependence, not import elimination. Precision in language matters, because credibility in energy policy is built on economic fundamentals, not celebratory headlines,” he added.

Also speaking on the subject, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, described the development as a major shift in Nigeria’s downstream oil market, citing the growing impact of local refining.

“That’s a significant drop. A 54 per cent reduction in fuel import spending in just two years signals increased local production, largely championed by the Dangote Petroleum Refinery,” Olatide said.

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He noted that the refinery’s reported supply of over 50 million litres of petroleum products daily into the Nigerian market aligns with recent Central Bank of Nigeria data, which show a sharp moderation in refined fuel imports.

According to him, the combination of expanding local refining capacity and residual imports is gradually strengthening Nigeria’s energy security.

“The 50 million litres daily supply of petroleum products into the Nigerian market, according to Dangote Refinery, correlates with the CBN reports. Nigeria is gradually becoming an energy secure country with the combination of local refining and imports,” Olatide asserted.

Further analysis

Further analysis of the quarterly data from the BoP report showed that refined fuel imports stood at $3.26bn in Q1 2025, before declining to $1.80bn in Q2 and $1.65bn in Q3, reflecting a steady moderation across the year.

However, Nigeria’s overall import bill continued to rise during the period. Total imports increased from $9.20bn in Q1 to $9.62bn in Q2 and $10.30bn in Q3, driven largely by non-oil imports, which climbed to $7.08bn in the third quarter.

On the export side, earnings from crude oil, gas, and refined petroleum products improved, rising to $13.05bn in Q3 from $11.25bn in Q1, supported mainly by crude oil exports, which stood at $8.45bn in the third quarter.

Gas exports, however, fell sharply, declining by 30.21 per cent quarter-on-quarter and 20.07 per cent year-on-year, due to infrastructure constraints and global market pressures.

The sustained spending on refined fuel imports comes amid the Federal Government’s long-standing push for energy self-sufficiency.

While recent data suggest that fuel imports are beginning to moderate, analysts say Nigeria’s transition to full self-sufficiency will remain incomplete until domestic refineries operate consistently at scale and meet local demand.

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Hardship: Labour pushes N154,000 minimum wage

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The National Public Service Negotiating Council of the Organised Labour has formally demanded a N154,000 minimum wage, a 120 per cent upward review of salaries and allowances for public workers in Nigeria.

The new demand, according to the union, is to mitigate what it described as the “life of servitude” currently being experienced in the country.

The demand was contained in a letter addressed to the Office of the Head of the Civil Service of the Federation, dated March 12, 2026, with reference number JNPSNC/Gen/Cor/Vol 1/163.

The demand was titled “Urgent need for the upward review of salaries and allowances of workers in the Nigerian public service and commendation for the approval of gratuity payment to retiring workers.”

The letter was jointly signed by the National Chairman of JNPSNC, Benjamin Anthony, and the National Secretary, Olowoyo Gbenga.

The JNPSNC premised its demand on the outcome of an exhaustive meeting of the council held on Monday, March 9, 2026, at the AUPCTRE National Secretariat, Wuse Zone 4, Abuja, Federal Capital Territory.

The letter read, “The National leadership of Joint National Public Service Negotiating Council writes to respectfully but firmly call the attention of your esteemed office to the urgent necessity for an upward review of salaries and allowances of all serving Public Servants in the Nigerian Public Service.

“Despite their immense contributions, public service workers continue to face severe economic hardship due to the rising cost of living and the declining purchasing power of their earnings.”

The council noted that over the years, Nigeria has experienced unprecedented economic pressures characterised by high inflation, increased fuel prices, rising transportation costs, and escalating prices of food items, housing, healthcare, and education.

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“The above realities have significantly eroded the real value of workers’ salaries and have made it increasingly difficult for many public servants to maintain a decent standard of living.

“It is important to note that the last major adjustments in workers’ remuneration have not sufficiently kept pace with the current economic realities.

“Many workers are now struggling to meet basic financial obligations, which has inevitably affected the morale, motivation, and overall productivity within the Public Service.”

The council stated that the national leadership of the Joint National Public Service Negotiating Council, therefore, strongly advocates an immediate and comprehensive review of the existing salary structure and allowances to reflect current economic conditions and ensure fairness, equity, and sustainability in workers’ remuneration.

“An upward review of workers’ salaries and allowances is a desideratum,” it stated.

It further noted that workers in the Nigerian Public Service had continued to demonstrate remarkable patience, professionalism, and commitment to their duties despite the prevailing economic difficulties.

However, it stressed that concrete steps must now be taken to safeguard their welfare and dignity.

In light of the foregoing, the council called on the office of the Head of the Civil Service of the Federation to urgently initiate the necessary processes for the upward review of salaries and allowances of public servants in Nigeria.

The council asked the Office of the Head of Service to initiate immediate negotiations and direct the National Salaries, Income and Wages Commission and relevant committees to begin immediate discussions with the Joint National Public Service Negotiating Council to negotiate for an upward review of salaries and allowances.

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“Consequently, new salary templates should be developed such that the minimum salary payable to an officer on Grade Level 01 Step 1 shall be N154,000 per month for Federal Public Servants (120% increase in Salaries and allowances).

“Harmonise Wages: ensure that the upward review is applied across all Ministries, Departments, and Agencies (MDAs), and strongly encourage implementation at sub-national levels to ensure equity;

“Implement Cost-of-Living Adjustments: Introduce automatic, periodic salary and allowance adjustments that align with inflation rates to prevent the recurring lag between wage review cycles; and prioritise welfare components: in addition to basic salary, implement non-monetary incentives such as subsidised transportation and affordable housing for civil servants,” the letter noted.

The council emphasised that a timely upward review of public servants’ salaries and allowances is not merely an economic imperative but a social necessity to ensure the sustenance of the workforce, maintain industrial harmony, and improve the efficiency of public service delivery.

It also reiterated its commitment to constructive dialogue with the government.

“We remain committed to constructive dialogue, resourceful engagement and collaboration with the government toward achieving a fair, sustainable, and mutually beneficial outcome for all stakeholders.

“We trust that this request will receive the prompt attention and action it deserves in the interest of workers, the Public Service as an institution and the nation at large; so as to nip in the bud possible escalation that may nosedive into spontaneous social unrest,” it added.

The national leadership of the council commended President Bola Tinubu for approving 100 per cent gratuity payment to retiring federal public servants.

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The commendation was conveyed through the Head of the Civil Service of the Federation, Didi Esther Walson-Jack.

According to the council, the approval represented a major step towards improving the welfare of retiring public servants.

“From the perspective of the national leadership of the Joint National Public Service Negotiating Council, the approval is not only a positive development but also a bold step towards ensuring that retiring public servants escape the life of servitude and serfdom often being experienced when out of public service which is always characterised by impoverish life after service,” it said.

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Refineries spend N5.7tn on foreign oil despite naira-for-crude policy

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Despite its status as Africa’s largest crude oil producer, Nigeria imported crude oil worth a staggering N5.734tn between January and December 2025 as domestic refineries grappled with persistent feedstock shortages, exposing a deepening supply paradox in the country’s oil sector, The PUNCH reports.

This comes in spite of the Federal Government’s much-publicised naira-for-crude policy designed to prioritise local supply.

Yet, even as the policy sought to channel crude to local refineries, Nigeria produced 530.41 million barrels and earned about N55.5tn from crude oil sales in 2025, highlighting a stark disconnect between robust upstream output and domestic supply shortages.

Data obtained from the National Bureau of Statistics and analysed by our correspondent on Tuesday, showed that the surge represents a dramatic shift from 2024, when no crude imports were recorded, indicating a 100 per cent increase year-on-year.

An analysis of the NBS Foreign Trade in Goods Statistics report revealed that crude oil imports, classified under “Petroleum oils and oils obtained from bituminous minerals, crude”, became one of Nigeria’s major import items in 2025, driven by supply shortages to domestic refineries.

In the first quarter alone, Nigeria imported crude worth N1.19tn, underscoring the urgency with which refinery operators turned to alternative feedstock sources.

The figure rose sharply by about 37.8 per cent to N1.64tn in the second quarter, before climbing further by 46.5 per cent to N2.403tn in the third quarter, reflecting intensifying domestic supply constraints.

However, imports dropped steeply by approximately 79.2 per cent to N499.75bn in the fourth quarter, suggesting a late-year easing in demand or improved local availability, though still indicative of a volatile and inconsistent crude supply environment throughout the year.

Although the NBS report did not name specific refineries, the pattern reflects the broader systemic failure in aligning domestic crude production with local refining demand.

A further breakdown of the figures shows wide monthly fluctuations in crude imports, reflecting unstable supply conditions in the domestic market.

Refineries imported crude worth N335.69bn in January, rising by 32.6 per cent to N445.27bn in February, before declining by 8.5 per cent to N407.29bn in March.

Imports dipped slightly to N335.31bn in April but surged dramatically by 116 per cent to N724.23bn in May, suggesting heightened supply constraints locally.

In June, imports fell by 19.5 per cent to N582.94bn, before spiking to a yearly peak of N1.28tn in July, an increase of about 120 per cent, marking the highest monthly import bill in the year.

This was followed by a 51.8 per cent drop to N619.24bn in August, and further declines to N499.41bn in September and N407.08bn in October.

Imports plunged sharply by 77.2 per cent to N92.67bn in November, before dropping to zero in December, indicating a temporary easing of demand or improved local supply towards year-end.

Overall, the trend underscores a volatile supply environment, with refineries forced to adjust sourcing strategies month by month.

Findings by The PUNCH indicate that local refineries, ranging from modular plants to mega facilities such as the Dangote Refinery, are increasingly turning to international markets due to persistent challenges in sourcing crude domestically.

The refineries cite a combination of structural and commercial factors behind the development.

This was confirmed by the Crude Oil Refinery-owners Association of Nigeria, which noted that refineries turn to imports for survival and increased production capacity.

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The CORAN Publicity secretary, Eche Idoko, stated in an interview that domestic refiners within the supply chain have been marginalised.

He confirmed that for several months, no allocation has been received under the Domestic Crude Oil Supply Obligation framework, naira for crude policy or through any other special arrangements.

He said, “Local refiners, especially the modular refineries, have not been getting crude, I mean zero allocation, under the DCSO or any other special arrangement.”

He said the DCSO implementation has been hampered by the ‘willing buyer, willing seller’ policy

Idoko said a modular refinery like Opac couldn’t get crude, and it stopped production for months.

According to Idoko, local refineries have the capacity to produce more than their current output, blaming the lack of enough feedstock for the current output. “We have the capacity to produce far more than what we are producing now. The challenge has always been inadequate feedstock,” he stated.

Idoko stated that some modular refineries like OPAC produce about 10 per cent of their capacities, while some shut down due to a lack of crude oil.

“A good example, the OPAC refinery has a 10,000-barrel capacity. It produces just about 1,000, and it’s not consistent. Sometimes, the refinery is shut down for months because of the unavailability of crude. The Dangote refinery was recently producing at 60 per cent of its total capacity due to the unavailability of feedstock.”

Earlier this month, Dangote Petroleum Refinery & Petrochemicals also cleared the air on the crude oil supply being received from the Nigerian National Petroleum Company under the naira-for-crude arrangement, disclosing that it receives five cargoes of crude monthly which are paid for in naira.

However, it stated that this falls significantly short of the 13 cargoes required each month to meet domestic demand.

The refinery in a statement issued further explained that the shortfall of eight cargoes is being bought from other sources outside the country.

In addition, it stated that the NNPC cargoes are priced at international market rates plus a premium.

As a result, the company said it is compelled to source additional crude from local and international traders, procuring foreign exchange at prevailing open market rates to complete the purchases.

Further investigations revealed that International Oil Companies operating in Nigeria have been reluctant to prioritise domestic crude supply, largely due to better pricing and fewer regulatory constraints in the international market.

Experts say IOCs prefer exporting crude under long-term contracts denominated in dollars, rather than selling locally under conditions that may involve pricing benchmarks, currency risks, or policy uncertainties.

They added that disputes over pricing frameworks, particularly when crude is sold at a premium and third-party influence, have further complicated domestic supply arrangements.

Similarly, an alternative solution provided by the government through the naira-for-crude policy to allow domestic refineries to purchase crude oil in local currency, reduce pressure on foreign exchange, and ensure a steady feedstock supply hasn’t met expectations.

The policy introduced in October 2024 gained prominence with the ramp-up of refining capacity, particularly from the Dangote Refinery, and was expected to mark a turning point in Nigeria’s downstream sector.

Under the arrangement, refiners would pay for crude in naira, while the government would manage foreign exchange implications through the Nigerian National Petroleum Company Limited.

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However, the 2025 import figures suggest that the policy has not fully achieved its core objective.

This situation is driven by several structural challenges, including a mismatch between allocated crude and refinery demand, persistent pricing disagreements over benchmark terms, concerns among upstream producers about naira volatility, and existing forward sales and export commitments that limit the volume of crude available for domestic refining.

The NBS data further showed that Nigeria sourced its imported crude primarily from African countries such as Algeria, Angola while imports from the United States of America accounting for the largest share.

This trend reflects the growing integration of global crude markets, where refiners prioritise reliability and quality over geographic proximity.

Commenting, energy analysts have faulted the implementation of the Federal Government’s naira-for-crude policy, arguing that it has failed to significantly improve domestic crude supply or reduce fuel prices.

The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the policy has delivered little impact since its introduction in 2024, as most refineries continue to rely heavily on imported crude.

Speaking in a telephone interview with The PUNCH, he said, “For me, the naira-for-crude policy that was initiated in 2024 has not yielded any reasonable output because the Dangote refinery still sources about 65 to 70 per cent of its feedstock from abroad, while about 95 per cent of modular refineries also source their crude outside the naira-for-crude initiative.

“So, the initiative, for me, is not effective, and that is why we are still seeing a large inflow and importation of crude oil in 2025. In turn, prices at the depot and pump have not been different from when we were fully importing refined products.”

He noted that while the coming on stream of large-scale refining capacity has improved product availability, it has not translated into price relief for consumers.

“The only difference now is that we no longer have supply fears; there is availability of products. But in terms of pricing, I would say the naira-for-crude policy has not translated into lower prices at the depot or pump,” he added.

Jeremiah attributed this to the continued reliance on international pricing benchmarks, even for locally supplied crude.

“Dangote’s crude from the Nigerian National Petroleum Company is still priced internationally and benchmarked to Brent. So it is not as effective as the name implies. The refinery still has to pay based on international prices when converted,” he said.

He argued that to achieve meaningful price stability, the government may need to rethink its approach.

“For me, I feel that the subsidy removal in 2023 should be replaced with another form of subsidy, but this time targeted at refineries. The crude supplied to local refineries should be subsidised. That is the only way prices can be stabilised and Nigerians will feel the impact at the pump,” he stated.

He added that the current arrangement contradicts provisions of the Petroleum Industry Act, which prioritises domestic crude supply.

“The agreement should be revisited. The policy is not effective, and Nigerians are not supposed to be buying fuel at high prices, considering that we have crude and a giant refinery. Local refineries should not struggle to access crude at all,” he said.

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Similarly, a Professor of Energy, Dayo Ayoade, said structural issues in Nigeria’s upstream sector have made it difficult for policies like naira-for-crude to succeed in practice.

“We have deeply unreliable supply from NNPC, largely because the company forward-sold crude oil to secure loans for the government in the past,” he said.

“Also, for over 19 years while the Petroleum Industry Bill was being delayed, there was significant underinvestment in the upstream sector. When you combine this with government’s priority of earning foreign exchange and servicing debts, you will see that, in practice, initiatives like naira-for-crude are more on paper than reality.”

He explained that Nigeria’s current production levels are insufficient to meet both export obligations and domestic refining demand.

“NNPC must have crude oil that it can supply, but it doesn’t. By the time international oil companies take their allocations under joint ventures and production sharing contracts, very little is left,” he said.

“Take the 650,000 barrels per day Dangote refinery, for instance. It would require about 650,000 barrels daily to operate at full capacity. That is not feasible at the moment. That crude simply does not exist in available volumes right now.”

Ayoade further noted that crude importation is built into the operational model of modern refineries.

“We also need to understand that the configuration of the refinery requires a blend of different crude grades. Nigeria’s light sweet crude alone is not sufficient, so some level of importation is part of the refinery’s design and business plan,” he said.

On the outlook for 2026, he warned that the trend of crude importation by domestic refineries is likely to persist.

“This pattern will likely will continue in 2026 because issues like logistics bottlenecks, pipeline vandalism, oil theft, and delayed field development cannot be solved in a short time,” he said.

“As long as crude oil accounts for over 95 per cent of our foreign exchange earnings and the government prioritises exports, we will continue to see this pattern for a few more years.”

He added, “That is why I am always cautious when people talk about new refineries coming on stream. The real question is: where will the crude oil come from? That is the fundamental issue.”

Nigeria has long relied on imported refined petroleum products due to inadequate domestic refining capacity. However, recent investments in local refineries were expected to reverse this trend by boosting in-country processing of crude oil.

The Petroleum Industry Act introduced provisions aimed at ensuring a steady supply of crude to domestic refineries, including domestic crude supply obligations.

However, implementation challenges, legacy contractual commitments, and market realities have slowed progress, leaving refiners to navigate supply gaps through imports.

The N5.734tn crude import bill in 2025 now highlights a new phase in Nigeria’s oil sector paradox, where the challenge is no longer just refining capacity, but access to crude itself.

As the country pushes to maximise value from its hydrocarbon resources, the ability to align upstream production with downstream demand will remain critical to achieving true energy independence.

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FG unveils ‘fly now, pay later’ credit scheme for domestic flights

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The Federal Government has introduced a new consumer credit product, “Fly Now, Pay Later,” aimed at making domestic air travel more accessible to Nigerians.

The Nigerian Consumer Credit Corporation disclosed this in an announcement posted on its X handle on Tuesday, stating that the initiative would allow eligible customers to book local flights and repay the cost over time through structured financing.

According to CREDICORP, the scheme is designed to remove the upfront financial barrier that often delays important trips for many Nigerians.

“Through this initiative, eligible customers can book domestic flights today and repay the cost over time through structured financing, removing the upfront barrier that often delays important trips,” the statement read.

CREDICORP said the solution is being delivered in partnership with MyVisaro and Alert Microfinance Bank as part of efforts to expand access to responsible consumer credit.

To apply, the corporation urged interested individuals to visit visaro.ng and book a flight to any city in Nigeria.

 

FG unveils ‘fly now, pay later’ credit scheme for domestic flights

“At CREDICORP, we remain committed to expanding responsible consumer credit and enabling Nigerians live better now, including flying locally. Fly now. Pay later. Opportunity shouldn’t wait,” it added.

The corporation noted that the initiative aligns with its broader mandate to promote financial inclusion and improve access to essential services through innovative credit solutions.

The launch comes amid growing concerns over the rising cost of domestic air travel in Nigeria, with many citizens facing affordability challenges despite increasing demand for intra-country connectivity.

During the 2025 Yuletide period, one-way fares on some domestic routes rose by about.

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Airlines have attributed the high ticket prices to the rising cost of aviation fuel, foreign exchange constraints, and other operational expenses.

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