Jet A1 prices hike January 1, signalling air travel turbulence
Oil marketers have declared a January 1, 2024, initiation of Jet A1 price hikes in various Nigerian regions. This escalation is foreseen to adversely impact air travel.
In Lagos, Jet fuel will now cost N1,023, while Port Harcourt and Abuja will see prices at N1,053 and N1,063, respectively—an approximate 9.08 percent rise from October 2023’s N938 in Lagos.
Abuja and Port Harcourt witness an 8% surge from N978, and Kano experiences a 7 percent increase from N993, all occurring within three months.
October 2023 had additional spikes with Lagos prices climbing 5.33 percent to N988. Abuja and Port Harcourt rose by 5.11 percent to N1028, and Kano increased by 5.24 percent to N1043.
November 2023 saw a 1.53 percent drop in Jet Fuel prices in Abuja and Port Harcourt, while Lagos and Kano remained steady.
December witnessed Jet A1 rising from N938 to N993 in Lagos, a 5.87 percent hike. In Abuja and Port Harcourt, it increased by 6.28 percent from N963 to N1023, with no change in Kano.
Despite seemingly small percentage shifts, these impacts resonate significantly within the airline industry.
Aviation Management Consultant, Babatunde Adeniji, emphasises that fuel costs, influenced by oil prices and currency depreciation, stand as a substantial expense for airlines. This intensifies existing financial pressures on airlines.
Adeniji states, “This compels them to raise fares, but customer resistance may limit their ability to do so, negatively affecting demand. Passengers will encounter higher fares, potentially seeking alternatives or reducing travel frequency. Businesses relying on air travel face increased costs.”
Olumide Ohunayo, Head of Research at Zenith Travels, predicts a substantial rise in airfares due to the new pricing structure.
Ohunayo anticipates a reduction in fares in the Southeast, which saw a surge during the festive season.
He noted, “Baffling fares in the Southeast and South South will decrease. Travelers on that route will experience a difference as people return in January.”
While acknowledging potential insulation in Lagos, Ohunayo urges caution, stressing the need for aviation and oil and gas regulators to ensure compliance with safety standards. He expresses concern about Jet A1 suppliers outside Lagos and calls for collaboration to maintain safety measures.
