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Airlines in pricing limbo amid 180% Jet A1 price surge

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Airfares have remained stagnant in Nigeria despite the rising cost of aviation fuel by 184 per cent in the last two months, occasioned by the ongoing crisis in the Middle East.

However, sources in different airlines who did not want their names in print, considering the sensitivity of the matter, told The PUNCH on Tuesday that the “pressure of competition” among local carriers kept the airfares low.

Aviation fuel, which was sold at N900 per litre in January, increased to N1,121 per litre as of 26 February 2026 and now sells for N2,557 per litre.

Aviation fuel is the highest consuming commodity of airlines’ finances, taking about 40 per cent of airlines’ resources. This is closely followed by aircraft maintenance.

Despite the spike in fuel prices and the financial burden on airlines, competition has been keeping the airlines in check against upping their ticket prices. Between January and March 30, the product has increased by 184 per cent; yet, airfares still sell for between N106,286 and N147,000 across major routes in the domestic market.

A search on the booking portal of Ibom Air, for instance, shows the Lagos-Abuja flight for April 4 goes for N114,600, while Uyo to Abuja on the same airline and date also sells for the same N114,500.

For United Nigeria Airlines’ portal, the Kano-Lagos flight from April 1 to April 7 sells for N142,500 for a one-way ticket, while the Lagos-Port Harcourt flight for the same date goes for the same N142,500 on the airline’s portal.

Besides, the Lagos-Abuja flight for April 4 on Aero Contractors goes for N106,286, while the Asaba-Abuja flight on the same airline sells for N102,179.

However, Air Peace is the most expensive on the local scene, with Lagos to Abuja air tickets for April 3 bookings selling for N147,000, while the return ticket – Abuja to Lagos – also goes for the same rate.

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The airline source said that instead of the fares going up, the operators had kept them at the same price as two months ago, yet they were struggling to remain in business.

The source also attributed the situation to the number of scheduled indigenous operators, in spite of low passenger traffic.

As of the time of filing this report, there are about 15 scheduled operators, while another two airlines in February and March, Enugu Air and Binani Airlines, respectively, secured Air Operators’ Certificates from the Nigeria Civil Aviation Authority, which would enable them to operate.

Nigeria’s passenger traffic has been on a steady decline in recent years. The industry recorded 15.6 million passenger movements on domestic and international routes in 2024, 15.8 million in 2023 and 16.2 million in 2022.

One of the sources said, “It’s the pressure of competition. Instead of going up, the pressure on pricing is downwards because of the number of players and the pricing they have entered the market with. It’s simply competitive pressure that keeps airfares stagnant.”

He, however, said that his airline was reviewing the current situation and would come up with a position in the coming weeks.

Data obtained from major fuel marketers in Nigeria indicated that aviation fuel currently goes for N2,557 per litre at Sokoto Airport, making it the airport with the most expensive sales of the product in Nigeria.

This is followed by Kano, which sells the product at N2,554 per litre, while both Port Harcourt and Asaba report rates of N2,543 per litre.

Besides, the product goes for N2,538 per litre at the Nnamdi Azikiwe International Airport, Abuja; Enugu airport, N2,535 per litre; and Warri airport, N2,530 per litre.

For Anambra airport, the product goes for N2,529 per litre; for Asaba airport, N2,528 per litre, with Lagos recording the cheapest rate of aviation fuel at N2,500 per litre.

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While operators refused to comment on the development despite calls and text messages, industry experts expressed their views. Aviation analyst Olumide Ohunayo warned that even if airlines make fare adjustments, they may not be sufficient to offset the mounting losses triggered by the sharp rise in aviation fuel prices, describing the situation as unsustainable for operators.

Ohunayo, who spoke amid growing concerns over escalating ticket costs, said airlines are caught in a difficult position where even significant fare increases may still fall short of covering operational expenses.

He said, “No matter the increase that they can make now, they may not be able to recoup their losses as a result of the fuel increase. When you compare the prices with other nations, you will discover that the fuel price in Nigeria is on the high side.”

He highlighted the rapid spike in fuel prices within a short period, noting that the trend has placed enormous pressure on airline operations.

The industry expert expressed concern that, unlike other countries, Nigeria has yet to implement measures to ease the burden on both operators and consumers.

He said, “It was about N1,000 in January, N1,500 in February, and it has now moved to over N2,500 in March. And this is the same country where Dangote is exporting this same fuel to Europe, and you will then begin to imagine what incentives are given to cushion this development.

“Other countries are bringing in their reserves to reduce the effects on the citizenry, and they have also reduced their taxes, in some cases up to 50 per cent. An example of that is Australia.”

Ohunayo questioned the response of the Nigerian government, urging authorities to act swiftly to prevent further strain on the aviation sector.

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He called for targeted interventions, including temporary tax reliefs for airlines, to help cushion the impact of rising costs, saying, “What is the Nigerian government doing to reduce the effect of this on Nigerians? So, I feel that no matter the eventual increase from airline operators, it still cannot be enough.

“There must be a way to support operators during this period, maybe by reducing their taxes for three months. There must be a way for the government to come in. Why are the operators the ones bearing the highest cost?”

A retired pilot, Muhammad Badamosi, has said airlines may be reluctant to further increase airfares despite rising operational costs, citing fears of losing passengers to road transport amid the current economic realities.

He said, “Yes, I think it’s the fear of losing passengers because Nigerians currently do not have money, and many may have to resort to road travel. Yes, we understand that that is taking a toll on the operators, but it is what it is. That is the condition Nigeria currently finds itself in.”

Badamosi explained that while airlines are under pressure to adjust fares in response to rising aviation fuel costs, they are also constrained by the risk of pricing themselves out of the market.

According to him, the situation has created a difficult balance for operators, who must navigate between sustaining their businesses and retaining customer patronage.

“For instance, I used to visit Kaduna once every two months, but now I have cut it down to three times a year. My frequency used to be six times a year; now I go there three times a year.”

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Read how Nigerians tap savings, loans to buy Dangote refinery shares

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Some Nigerians seeking to invest in the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering have turned to personal savings, loans and proceeds from the sale of assets to raise funds to buy shares, Saturday PUNCH has learnt.

Findings by our correspondents revealed strong interest in the shares among prospective retail investors, some of whom said they expected the investment to yield substantial returns in the future.

While some respondents said they were dipping into savings or raising funds through other means, others said the prevailing economic hardship had made it difficult for them to participate in the offer.

The refinery opened its IPO on Monday, September 14, giving Nigerians an opportunity to own equity in the company.

The offer comprises 4.1 billion ordinary shares priced at N525 each, with the company targeting about N2.15tn to part-fund an expansion that would nearly double the refinery’s capacity to 1.4 million barrels per day.

The minimum subscription is 10 shares, costing N5,250.

Dangote Group Chief Executive Officer, Aliko Dangote, said the low entry threshold was deliberately set to allow ordinary workers, including drivers, cooks and domestic staff, to become shareholders, describing the offer as “the IPO for the people.”

The offer is expected to close on October 13.

Investors turn to savings, loans

A staff member of the Federal Ministry of Works, David Adelabu, described the shares as expensive for struggling civil servants but said he considered the offer an opportunity to become a shareholder in the refinery.

He said, “I have small shares in some companies, including Glo and MTN, but Dangote’s shares will be the highest I will be buying. It is on the high side, but I feel this is an opportunity to become a shareholder in Dangote.

“I understand that the dividends are not going to be immediate, but I don’t mind even if it will entail selling a plot of land I have in Metumbi here in Minna. I will gladly do so.”

A trader in Dutse, Jigawa State, Adamu Bala, said he planned to use savings from his business to buy the shares.

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“I will not sell my house. I will use a small profit from my shop to buy,” he said.

Similarly, a civil servant, Fatima Mannir, said women in her group had started raising money through contributions, known as adashe, to participate in the offer.

“We have started raising money through adashe,” she said.

A trader in Damaturu, Yobe State, Malam Musa Ibrahim, said he invested part of his business savings after learning about the offer.

“I am using part of the money I have saved from my business.

“I believe that if I can invest a small amount now, it may become useful to me in the future. But I am also being careful because business is not easy at the moment,” he said.

Another resident, Aisha Mohammed, said she raised money by cutting down on some household expenses.

“I did not borrow money to buy the shares. I have been saving little by little, and when I heard about the offer, I decided to use part of what I had saved,” she said.

A businessman, Abdullahi Yusuf, however, said he obtained financial assistance from a friend to increase his subscription.

“I wanted to buy more shares than what my savings could afford, so I discussed it with a friend who agreed to lend me some money.

“I know that borrowing money to invest carries risks, but I am hoping that the investment will perform well. I will repay the money from my business income,” he said.

A petty trader, Hauwa Lawan, said she sold some personal belongings she no longer used and added the proceeds to her savings to finance her purchase.

“I sold some things that I was no longer using and added the money to my savings,” she said.

A farmer, Mallam Abdullahi Adamu, said he sold farm produce to raise about N500,000 to invest in the shares.

In Kano State, an investor, Abdulmalik Ibrahim, said he bought 10 shares for N5,250 using personal funds.

Hardship keeps some investors away

While some Nigerians are finding ways to participate in the IPO, others said economic pressures had put the investment beyond their reach.

See also  Marketers warn against disruption as Dangote plans direct fuel supply

A civil servant in Kogi State, Saliu Joseph, said he would have loved to invest but had just paid his children’s school fees.

“Right now, I don’t think I can afford to participate unless a miracle happens,” he said.

A retired permanent secretary in the state, Bola Boro, also said he would not participate because he could not afford the investment at the moment.

“As a retired civil servant, I cannot afford such an amount to invest in the offer. Even though I am a fan of investment through the stock market, which I have been doing for years, I don’t think it will be convenient for me to participate considering the time frame of just one month,” he said.

A civil servant, Kuta Abdulahi, said the financial demands of his children’s education had left him unable to participate in the share offer.

“I must tell you the truth, I know about the Dangote Refinery shares, but I cannot even think of it at this time. My children are just resuming a new term in school. Where will I get the money for their school fees before thinking of buying shares? Please, I have a lot on my head,” he said.

Similarly, a vulcaniser, Ahmed Alkali, said his income was barely enough to meet his family’s basic needs, making investment in shares difficult.

“With the kind of job I do, I am working from hand to mouth. So, how can I buy shares when I have not eaten?” he asked.

Experts warn against borrowing

Investment experts, however, cautioned Nigerians against taking loans, selling properties or committing all their savings to the IPO, warning that equity investments carry risks.

Speaking with Saturday PUNCH, the Group Managing Director of Lancelot Group, Adebayo Adeleke, urged prospective investors to understand the risks associated with the capital market before committing their funds to the IPO.

Adeleke, who is also a former Secretary of the Independent Shareholders Association of Nigeria, said capital market investments should be made with funds that investors could afford to leave untouched for the long term, noting that equities were unsuitable for people struggling to meet immediate financial needs.

He said, “When you buy shares, you are buying a portion of the ownership of the business. Investment takes a lot of time to pass through gestation, to stability, to profitability. And you cannot, with any degree of certainty, predict when the company is going to turn the corner and begin to produce profits.

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“So, investment money is not the money you are likely to need in the next two months, three months, six months, even one year. If you cannot part with your money for a minimum of three to five years, the capital market is not the place to invest.”

Adeleke, however, described the IPO as a strategic investment, citing the refinery’s scale and demand for its products.

Also speaking, the Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, urged Nigerians to consider the risks associated with the investment and avoid committing all their savings to the offer.

He said, “There are plenty of risks to this business. It’s not risk-free. Things can get worse for the business. Valuation is based on expectations of what will happen in the future. Things might not go as planned. And, like we all know, equity is a risky business.”

Olubunmi particularly cautioned prospective investors against selling property or using up all their savings to invest in the offer.

He advised them to invest only a portion of their funds and diversify their portfolios.

The expert also advised those considering taking loans to buy the shares to have a separate and reliable repayment plan rather than depending on returns from the investment.

The Emir of Kano, Muhammadu Sanusi II, had earlier warned prospective investors against using their children’s school fees or selling their homes to invest in the shares.

Sanusi, who gave the warning on Thursday while speaking at the company’s roadshow in Kano, urged prospective investors to invest only money they could afford to set aside for some time, suggesting amounts such as N10,000, N20,000 or N30,000.

Source: punchng.com

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ARE NIGERIANS BUILDING CHINA’S ECONOMY WHILE NEGLECTING THEIR OWN?

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While other nations are busy producing, manufacturing and exporting, Nigeria must ask itself a difficult question: Are we building our own economy, or simply creating a bigger market for other countries?

Nigeria has a huge population, abundant natural resources and a massive consumer market. Yet the country continues to depend heavily on imported finished products—from electronics and clothing to machinery, household goods and other consumer items.

The issue is not simply about Chinese businesses or businesses from any other foreign country operating in Nigeria. Foreign investment can bring capital, technology, jobs and expertise.

The bigger issue is whether **Nigerian businesses are being given the opportunity and support to manufacture competitively at home.

Instead of remaining primarily a consumer of finished products, Nigeria needs to strengthen its manufacturing sector and move further up the value chain.

Nigeria needs to produce, not just consume.

A stronger manufacturing economy could help Nigeria:

* Create more jobs for Nigerians
* Add value to locally available raw materials
* Develop industrial skills and technology
* Reduce excessive dependence on imported finished goods
* Build competitive Nigerian companies
* Increase the country’s ability to export

The goal should not be to drive legitimate foreign businesses out of Nigeria. The goal should be to build an economy where **Nigerian manufacturers can compete, grow and eventually take Nigerian-made products to markets around the world.

The question Nigerians should be asking is simple:

**Why should Nigeria remain one of the world’s biggest markets for finished products when we have the potential to manufacture many of them ourselves?

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🇳🇬 **Nigeria must move from being predominantly a consumer nation to becoming a stronger producer, manufacturer and exporter.

What do you think?

Which products should Nigeria prioritize for local manufacturing instead of relying heavily on imports?

Share your thoughts in the comments.

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ICRC defends toll pricing on highways

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The Infrastructure Concession Regulatory Commission has defended the toll pricing structure under the Highway Development and Management Initiative, saying charges are evaluated against the quality and benefits of the upgraded roads.

In a statement made available to PUNCH Online on Thursday, the Director-General, Dr. Jobson Ewalefoh, cited the 227-kilometre Akwanga–Makurdi road corridor as an example.

He said the route has four toll gates, and motorists pay as they travel along it.

He argued that toll payments should be viewed against the previous costs imposed by the poor condition of the road, including lost man-hours, vehicle damage and accident risks.

Feedback from road users, he said, shows many motorists are willing to pay tolls where they see clear improvements in road quality.

Some drivers have expressed support for similar arrangements on other major corridors if the roads are upgraded to the same standard.

“That, to me, is the beauty of a well-structured PPP,” Ewalefoh said.

He explained that negotiators carefully consider toll pricing to keep charges fair. A portion of the revenue is set aside specifically for road maintenance. Under the concession agreements, the government does not bear additional maintenance costs for the duration of the contract.

The government must repair potholes within 48 hours, and it funds major routine repairs from the dedicated toll revenue.

Source: punchng.com

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See also  Recapitalised banks poised to drive Nigeria’s $1trn economy ambition
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