Petrol Queues Return Amid NNPC’s Subsidy Payment Delays

Motorists in various parts of Lagos experienced renewed petrol queues on Thursday, pointing to the Nigerian National Petroleum Company Ltd (NNPC)’s challenges in fulfilling national fuel demand.

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

The NNPC Ltd has traditionally depended on government subsidies to stabilize petrol prices for consumers.

However, delays in payments by its trading arm, NNPC Trade Ltd, to international and Nigerian trading partners have resulted in financial strains.

These unpaid dues to entities such as Trafigura, PV Oil Singapore PTE Limited, Mercuria, Total, and prominent Nigerian traders, have significantly impacted the NNPC’s ability to import sufficient petrol quantities.

BusinessDay investigations reveal that the contractual agreements for supplying Nigeria’s petrol, alongside some diesel and jet fuel needs, typically span 90 days.

The disruption in this cycle due to the NNPC’s cash flow issues has directly led to the observable fuel scarcity and the formation of long queues at petrol stations in Lagos.

A senior oil executive in Nigeria’s downstream sector told BusinessDay, “The government is struggling to clear a backlog of subsidy bills for November and December which affected 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.”