Business

Airfares Soar As Foreign Airlines Hike Exchange Rate

Published

2 years ago

March 27, 2023

International airfares on Nigerian routes have gone up further by over 20 per cent after foreign airlines raised the exchange rate for ticket sale from N462 per dollar to N551 per dollar, findings by The PUNCH have revealed.

International travellers on Nigerian routes have been paying higher airfares after carriers blocked their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds

The latest increase in the naira-dollar exchange rate for ticket sale by the International Air Transport Association, the Switzerland-based trade association of the world’s airlines, is expected to worsen the plight of Nigeria travellers who are already paying higher airfares.

Multiple travel companies confirmed to our correspondent on Friday that global distribution system companies had notified them of the latest increase.

They said the development was not unconnected with the difficulty faced by foreign carriers in repatriating their ticket sale proceeds out of Nigeria.

According to travel agents, the increase in the exchange rate has led to an over 20 per cent increase in international airfares.

“Virgin Atlantic which has a promo of about N800,000. This same promo is going for about N1.1m as a result of the increase in the exchange rate,” the chief executive officer of a travel agency, who chose to speak on condition of anonymity, said.

As of January this year, foreign airlines flying into Nigeria had about $743m in trapped funds in Nigeria. IATA has said Nigeria has the highest amount of foreign airlines’ trapped funds globally.

Stakeholders and travel firms have however emphasised the need for the Federal Government to direct the CBN to expedite the release of the trapped funds.

A former President of the National Association of Nigerian Travel Agents-the trade body for local travel agents-Mr Bankole Bernard, who also confirmed the latest increase in IATA’s exchange rate for ticket sales, said the Federal Government needed to honour the provisions of the Bilateral Air Services Agreement signed with foreign countries particularly as it affects the repatriation of funds.

“Today, the rate at which we are issuing tickets is N551 to a dollar. Is that the official rate? No, but that is the rate we are issuing tickets, which is moving closer to the black market rate. This means the issue of trapped funds would not have been if it had been properly managed,” he said.

“The funds became trapped because we (the government) were not ready to give foreign airlines funds at the official rate. Why didn’t you tell them the rate you would give them funds so that they can sell their tickets at a particular rate as long as it is official? After all, we have multiple exchange rates. So, what will make this one different? Then, there will not be an issue of trapped funds and people will do their business and the agony travellers are facing will not be there.”

The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, a research firm, said foreign airlines could not be blamed for the latest increase in the exchange rate.

He said, “In dollar terms, airfares have not gone up, It is still the same amount. The increase will only affect those who buy their tickets in naira. But we can’t blame foreign airlines. We need to put ourselves in their shoes. Why can’t they repatriate their funds? They are losing money by not being able to repatriate their funds. Most of their expenses are denominated in dollars, how will they pay for all these services and goods when they can’t repatriate their funds?”

IATA had a few weeks put foreign airlines’ trapped funds in Nigeria at $743,721,097 as of January 2023.

IATA disclosed this in a letter addressed to the Minister of Aviation, Hadi Sirika, and signed by its Area Manager for West and Central Africa, Dr Samson Fatokun.

IATA urged the minister to intervene and ensure the resolution of the issue of airlines’ blocked funds in Nigeria.

The letter read in part, “For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country. Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743.721.092 from $662m in January 2022 and $549m in December 2022.”

While highlighting the social-economic impact of the airline-blocked funds in Nigeria, Fatokun said the increasing backlog of blocked funds of international airlines would impact negatively the foreign direct investment in the country, at a moment the country was expecting investment in the concession of some of its major airports.

He also noted the continued delay in allowing foreign airlines to repatriate their funds violates BASA.

Sirika later promised that the Federal Government would ensure the backlogs of unremitted funds were paid.

He was not specific on when this would be done. The Central Bank of Nigeria had a few months ago released part of the trapped funds. Since then, however, the central bank appears not to be looking in the direction of the foreign carriers as the amount of trapped funds rises on daily basis.

The President of the Association of Foreign Airlines and Representatives, Mr Kingsley Nwokoma, said IATA reviews exchange rates periodically, adding that the current increase might have passed through necessary steps.

According to him, foreign carriers have been finding it difficult to repatriate their funds, noting that this has made doing business in Nigeria very difficult.
PUNCH

Business

Dangote Fuel Sells Cheaper In Togo Than In Nigeria – Falana Laments

Published

2 days ago

September 15, 2025

Editor

Human rights activist Femi Falana, SAN, has lamented that fuel taken from Dangote is cheaper in Togo than in Nigeria.

Falana expressed his concerns on Sunday while responding to questions in an interview on Politics Today, a programme on Channels Television.

He urged the federal government to review the proposed 5 per cent fuel surcharge and ensure that further hardship is not imposed on Nigerians.

“I guess the government wants to go back to the drawing table and ensure that it is not accused of multiple taxes or double taxation because consumers will pay VAT for buying fuel. They will now put an additional 5 per cent tax.

“I think this is what Nigerians are complaining about. And from what we just read today is that the Dangote fuel taken from Nigeria is now cheaper in Togo than in Nigeria I think about 65 naira.

“So, the government will have to review these developments (the proposed 5 per cent fuel surcharge) and ensure more hardship is not imposed on Nigerians,” he said.

Business

Falana Reveals Those Behind Subsidy Removal

Published

2 days ago

September 15, 2025

Editor

A Senior Advocate of Nigeria, Femi Falana, has once again criticised President Bola Tinubu’s removal of the fuel subsidy.

Speaking in an interview on Sunday’s Politics, a programme on Channels Television, the human rights activist stated that no country in the world has completely abolished subsidies.

“There’s no way you can remove subsidy completely. No country in the entire world has abolished subsidies completely.

“Even leading Western countries like the United States, the United Kingdom, France and others subsidise electricity, agriculture, and many aspects of the lives of their people.

“So, when the Nigerian Government said it was removing subsidies, as a matter of fact, if I must say this, it was the World Bank and the International Monetary Fund, IMF, that insisted that the government must remove all subsidies,” he said.

Business

‘We Like Greek Gifts,’ Nigerians Blast NUPENG Over Dangote’s Fuel Price Reduction

Published

3 days ago

September 13, 2025

Editor

The decision of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) to warn Nigerians against accepting Dangote Refinery’s recent fuel price reduction has drawn heavy backlash on social media, with many citizens mocking the union and embracing what they described as “much-needed relief.”

Dangote had announced lower petrol pump prices in several states alongside a new scheme to deploy compressed natural gas (CNG) trucks directly to filling stations, a move expected to reduce logistics costs.

But NUPENG dismissed the offer as a “Greek gift,” alleging that the refinery was undermining workers’ rights, sidelining the union, and pushing drivers into a rival association.

However, netizens have lambasted the union, querying that during hard times, NUPENG has never supported the masses.

On X (formerly Twitter), Nigerians quickly turned NUPENG’s warning into a trending topic, using humour and sarcasm to lampoon the union.

Oloye Somorin Osifeso (@OloyeSomorin) wrote: “We like Greek gifts in my garage.”

Just Jude (@JustJude) asked bluntly: “Is it your deception?”

Oladele (@Oladele) quipped: “As Dangote Refinery dey offer Nigerians Greek gift, why can’t NUPENG too offer Nigerians French gift?”

Agbalaka (@Agbalaka) queried: “Can they tell Nigerians what exactly they are fighting about?”

CBN Gov Akinsola (@Akinsola) joked: “Then give us Trojan gift now 😆. Man do man. Man no go vex.”

Omobalaji (@Omobalaji) teased: “NUPENG, oya surprise us with Arabian gifts.”

Habdulakeem Bahdmus (@BahdmusHabdulakeem) added: “If Dangote is showering Nigerians with Greek gift, NUPENG can also set up a Roman gift now.”

Femi Yekinni (@FemiYekinni) steered it back to reality: “We thank them for their advice. Now, @DangoteGroup pls how do we schedule deliveries to Badagry?”

Curtis Abbi (@CurtisAbbi) slammed the union: “Nigerians will manage the Greek gift. @officialNUPENG9, what gift have you given Nigerians in your entire years of existence? NUPENG should offer Nigerians their own Somalian gift 🤣.”

Akin Adejola (@AkinAdejola) echoed the sentiment: “LOL. I can bet Nigerians don’t mind the gift. NUPENG should gift Nigerians same ‘Greek gift’ too if they have any goodwill. NUPENG is the enemy of progress in the oil & gas sector.”

Adeola Akinwande (@adeolarewaju9) criticised union leaders: “Does NUPENG remember Nigerians at hard times? They have all failed Nigerians the same way the @NLCHeadquarters has failed. They are living big on unionism and cashing out big time. Without unionism, some of their excos are nobody. They should stop the crocodile tears.”

Okunwa U. U. Azikiwe (@OkunwaUUazikiwe) argued: “Competition has created jealousy by the previous monopoly in the sale of fuel. They have lost control, and it is paining them that they are no longer in control. SMH!!!”

Solihull Abdulkareem (@SolihullAbdul) chipped in: “NUPENG or whatever, do you want the market to be monopoly? You’ve been doing what you want for many years. It’s time for change, just accept it and move forward.”

Temidayo (@Temidayo) asked: “It’s a lie. What benefits has your union provided for Nigerians? Middlemen syndrome has been room for corruption. Your association should go and buy shares in Dangote and work together to make Nigeria great.”

And LegalTech Sam Akanbi (@SamAkanbi) summed up: “Nigerians no longer want your Nigerian gift, we want the Greek gift. If you have a better offer, we’d abandon Dangote’s Greek gift and take yours. But for now, let the Greek gift go round.”

Recall that NUPENG earlier alleged that Dangote Refinery was forcing truck drivers to abandon its union for a rival group, the Direct Trucking Company Drivers Association (DTCDA).

The union also accused Dangote of undermining collective bargaining rights and violating a Memorandum of Understanding (MoU) signed under government supervision.

Dangote, however, denies the claims, insisting that union membership remains voluntary and that its delivery scheme is designed to cut costs and ease supply.

The federal government has intervened, with the Ministry of Labour and the Department of State Services mediating between both parties.