Jet A1 crisis: Tinubu approves 30% statutory fee relief for

President Bola Ahmed Tinubu has approved a 30% relief on statutory fees owed by Nigerian airlines to aviation regulatory agencies, a measure designed to ease cashflow pressure as the country faces a severe Jet A1 fuel shortage. Aviation Minister Festus Keyamo announced the relief, which targets agencies under the aviation ministry, including the Nigerian Civil Aviation Authority (NCAA) and the Accident Investigation Bureau (AIB).

The move signals government acknowledgment of aviation sector distress, but raises critical questions about whether fee waivers address the root cause: sustained high fuel prices and supply scarcity.

## What triggered the Jet A1 crisis in Nigeria?

Nigeria's aviation fuel crisis stems from three converging pressures: global crude oil price volatility, refinery underperformance (domestic fuel production remains below 50% capacity), and limited forex for fuel imports. Jet A1 prices have fluctuated between ₦950–₦1,150 per litre in recent months—up 40% year-over-year. For airlines operating narrow-margin regional routes, this translates to ticket price increases of 25–35% and potential route abandonment.

## How does fee relief help airlines?

The 30% reduction targets non-fuel operational costs. Annual regulatory fees for major carriers typically range ₦1.5–₦3 billion. A 30% cut frees ₦450–₦900 million per airline annually—meaningful but insufficient when a single aircraft burns 5,000+ litres per flight at current prices. The relief is temporary, underscoring that it's a palliative, not a structural fix.

**Market implications are mixed.** Aviation stocks (notably Air Peace, Arik Air lessees, and ground service providers) may see marginal margin improvement, but investor confidence hinges on fuel supply normalisation, not fee forgiveness. Domestic carriers already operating at 60–70% load factors cannot absorb Jet A1 cost shocks through efficiency alone.

## Why isn't the government tackling fuel supply directly?

Nigeria refineries—Dangote, Port Harcourt, and Warri—have cumulatively underperformed nameplate capacity due to crude allocation disputes, maintenance cycles, and export-price arbitrage. Tinubu's government approved the Dangote refinery's crude access last year, yet fuel still imports represent 40% of supply. A structural solution requires sustained crude supply to refineries, stable forex, and transparent fuel pricing—politically harder than fee waivers.

## Will this relief prevent airline collapses?

Unlikely. Small carriers (Aero Contractors, Dana Air) operate with sub-₦500M equity and cannot weather sustained ₦1,000+/litre fuel costs. Larger players (Air Peace, Max Air) have hedging capacity and can adjust routes, but profitability remains compressed. Without complementary policies—fuel subsidy targeting, forex stability, or regulatory route protection—the fee relief extends runway but doesn't solve the underlying crisis.

**The broader context:** Nigeria's aviation sector contributed $2.4B to GDP pre-COVID; it now operates at 35–40% of potential due to fuel costs and insecurity. Fee relief is political theatre; investors should watch for concrete fuel supply measures or expect continued consolidation.

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