LAGOS/Nigeria: CITA Energies has urged Dangote Petroleum Refinery to review its pricing and payment terms for aviation fuel, arguing that the improved availability of locally refined Jet A1 has yet to translate into the cost relief expected by fuel marketers and airlines.
The company’s chairman, Dr Thomas Ogungbangbe, made the appeal during CITA Energies’ 20th anniversary celebration in Lagos on Friday, October 16, 2026, saying differences between the refinery’s pricing arrangements and the international benchmarks used by marketers were creating uncertainty and raising operating costs.
Ogungbangbe explained that aviation fuel marketers commonly base their sales contracts on the average of international benchmark prices recorded during the preceding month. He said the different pricing structure applied to locally supplied fuel could make it difficult for marketers to determine their final purchase costs when negotiating sales to customers.
He said an additional premium introduced by the refinery in March, during unrest in parts of the Middle East, had compounded the problem. He called for the premium to be reconsidered, arguing that a review could improve pricing alignment and ease some of the pressure on airlines.
The chairman also questioned the requirement for buyers to place 25 per cent of a financial instrument under lien, saying the arrangement increased financing costs for marketers and contributed to the overall cost of supplying aviation fuel.
According to him, businesses facing higher procurement and financing expenses may have little option but to transfer some of those costs to customers. Airlines, already contending with substantial operating expenses, are consequently exposed to further financial pressure.
Despite his concerns, Ogungbangbe acknowledged the importance of Dangote Refinery’s entry into the domestic Jet A1 market. He said local production had significantly improved product availability in a country that previously depended on imported aviation fuel.
“With Dangote, the issue of scarcity is already eradicated; availability is assured but the challenge is in the pricing,” he said.
He warned that pricing differences could also influence purchasing decisions, with some marketers potentially considering imports where international pricing arrangements offered more favourable terms.
Ogungbangbe said the Federal Government and industry stakeholders needed to ensure that the benefits of domestic refining extended beyond availability to include competitive pricing and lower operating costs throughout the aviation value chain.
He also expressed concern about the profitability of aviation fuel businesses, describing the past two years as particularly difficult. He said some operators had declined business opportunities where supplying customers at prevailing rates could result in losses.
The chairman said the situation had made commercial decisions more challenging, especially where businesses had existing customer commitments but could not confidently predict their final supply costs.
He stressed that a stable and predictable policy environment was essential for investment planning and business sustainability. He added that aviation fuel operations required significant technical expertise and strict compliance with international quality standards.
Reflecting on CITA’s development, Ogungbangbe said the company had helped demonstrate that indigenous businesses could compete in a sector historically dominated by international oil companies. He said the firm had expanded its operations, trained thousands of people and relied on workforce commitment, adaptation and perseverance to sustain its growth.
He urged policymakers to adopt measures that support local investment and enable Nigerian operators to compete effectively, while ensuring that pricing and other structural challenges did not undermine the long-term sustainability of the aviation industry.
Ogungbangbe also commended President Bola Tinubu, the Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), and the Nigeria Civil Aviation Authority for their roles in supporting the aviation sector and creating an environment in which local businesses could operate.
The anniversary ceremony also featured the presentation of awards and cash gifts to staff members recognised for their contributions to the company.
