File photo: Fuel queue in Lagos
February 8, 2022
The emergent fuel queues may disappear this week as Nigeria’s state oil firm, NNPC Limited, has asked trading firms for emergency supplies of petrol to replace cargoes that were rejected because of their poor quality, two sources with direct knowledge of the matter said.
Megacity Lagos and the capital Abuja face fuel shortages and queues built up outside some petrol stations over the weekend. The queues continued as at the time of this report.
NNPC was seeking about 500,000 tonnes of petrol, one of the sources added. The sources spoke on condition of anonymity due to the sensitivity of the matter.
NNPC did not immediately respond to requests for comment, reports Reuters.
Nigeria depends almost entirely on imports to meet its domestic gasoline needs after many failed initiatives to revamp its dilapidated refineries. Daily petrol consumption is roughly 40 million litres.
NNPC handles nearly all these imports through crude-for-fuel contracts, known as direct sale, direct purchase (DSDP), with consortia of local and foreign oil firms.
Each consortium receives 20,000 barrels per day (bpd) of crude oil in exchange for products, making the combined total about 320,000 bpd of Nigeria’s output. Nigeria, an OPEC member, produced about 1.5 million bpd of crude in January.
Cheap fuel is one of the few benefits the average Nigerian feels they get from the government, which sets price caps at the pump through a controversial and patchy subsidy scheme.
The subsidy scheme had been dogged with tales of corruption and outright stealing from the public till by minders of the sector in concert with top government functionaries.
With soaring oil prices, the emergency stop-gap will be costly. The International Monetary Fund (IMF) said on Monday Nigeria should axe subsidies due to a widening budget deficit.
With additional reports by Reuters.
