Fuel Queues Return to Lagos Amid NNPC's Subsidy Payment Challenges

Motorists in various parts of Lagos faced renewed petrol queues on Thursday as the Nigerian National Petroleum Company Ltd (NNPC) grapples with challenges in meeting national fuel demand.

The NNPC, the country’s sole petrol importer, is struggling with subsidy payment backlogs, impacting its procurement capabilities.

Traditionally reliant on government subsidies to stabilize petrol prices, the NNPC's trading arm, NNPC Trade Ltd, has faced delays in payments to international and Nigerian trading partners, including Trafigura, PV Oil Singapore PTE Limited, Mercuria, Total, and local traders.

These outstanding dues have significantly hampered the NNPC's ability to import sufficient petrol quantities, causing disruptions in the supply chain and leading to observable fuel scarcity and long queues at petrol stations in Lagos.

According to investigations by BusinessDay, contractual agreements for supplying Nigeria’s petrol typically span 90 days, but the NNPC's cash flow issues have disrupted this cycle.

A senior oil executive in Nigeria’s downstream sector explained, “The government is struggling to clear a backlog of subsidy bills for November and December, affecting the importation of products in the last two days. Apart from Ardova, which currently has stocks, some of the biggest marketers such as NNPC’s retail Limited, Mobil, and TotalEnergies are currently down with low petrol stocks. That is why you are seeing the scarcity around Lagos, which may spread to other states.”