Nigeria is witnessing long queues at petrol stations nationwide due to concerns about fuel shortages linked to the Nigerian National Petroleum Company (NNPC) Limited’s $6 billion debt backlog. An investigation by BusinessDay revealed that NNPC owes international traders around $6 billion for imported petrol, with payments delayed beyond the standard 90-day period.
According to Reuters, the delays have resulted in overdue payments of $4 billion to $5 billion for January imports alone, causing international suppliers to withdraw from recent tenders. An industry insider disclosed that traders tolerate the situation due to $250,000 per month compensation for late payments. The reintroduction of fuel subsidies, scrapped in May 2023, is draining NNPC’s cash reserves and hindering its ability to finance petrol imports and support President Bola Tinubu’s administration.
The impact of these payment delays is evident as two suppliers have ceased participating in tenders after reaching their debt exposure limits to Nigeria. With NNPC’s suppliers like Vitol, Mercuria, and Gunvor declining to comment, sources indicate that Nigeria’s petrol tenders for June and July have been smaller. NNPC plans to import about 850,000 tonnes of petrol in July, down from the usual 1 million tonnes, leading to renewed petrol scarcity and long queues in major cities like Lagos and Abuja.