Motorists in certain parts of Lagos encountered renewed queues at petrol stations on Thursday, attributed to challenges faced by the Nigerian National Petroleum Company Ltd (NNPC) in fulfilling national petrol demands due to unpaid subsidies.
As the sole importer of petrol in the country, NNPC relies on government subsidies to maintain affordable pump prices. However, delayed payments to international traders, including major Swiss firms and Nigerian traders, by NNPC Trade Ltd, a subsidiary, have resulted in cash flow constraints, impeding the procurement of sufficient petrol.
Contracts governing the supply of petrol, diesel, and jet fuel to Nigeria, typically set at 90 days, have been affected by outstanding subsidy bills for November and December, affecting importation activities in recent days, according to industry sources. A senior executive in Nigeria’s downstream sector highlighted the backlog of subsidy bills as a significant factor hindering petrol imports, leading to low stocks at major marketers such as NNPC’s retail Limited, Mobil, and TotalEnergies, except for Ardova, which currently holds sufficient stocks.
Source: Business Day