Nigeria is experiencing a petrol shortage, with the oil regulator attributing the scarcity to logistical challenges.

Petrol shortages in Nigeria's major cities have exacerbated, resulting in lengthy queues at fuel outlets on Monday. This has severely impacted transportation and businesses, underscoring the struggles of the state oil firm NNPC Limited to fulfill its supply obligations.

Last year, President Bola Tinubu's administration permitted petrol imports by private firms. However, due to foreign currency shortages and a price cap on petrol, NNPC remains the sole importer.

Petrol is extensively used in cars and generators by households and small businesses. Any scarcity has far-reaching consequences on the economy, particularly amidst grappling with its highest inflation rate in 28 years.

In Lagos and Abuja, some retail stations with petrol have raised the price per litre to as high as 840 naira, compared to NNPC's selling price of 617 naira.

Oil marketers who obtain fuel from NNPC have reported inadequate volumes for distribution nationwide, attributing the issue to logistical challenges. Femi Soneye, spokesperson for NNPC, stated that the state-owned firm possesses over 1.5 billion litres of petrol, sufficient for at least 30 days, and assured that queues would dissipate within days.

"Regrettably, a three-day distribution disruption occurred due to logistical challenges, which have since been resolved. However, rectifying such disruptions typically requires double the time to return to normal operations," Soneye acknowledged. He also conceded that some outlets are capitalizing on the situation to maximize profits.

The shortages merely scratch the surface of NNPC's deeper issues. The company has been unable to clear a backlog of approximately $3 billion owed to fuel importers due to the depreciating naira and escalating global fuel prices, which amplify the effective subsidy it bears. Despite this, NNPC denies any debt to fuel traders.

Moreover, NNPC faces challenges in sourcing sufficient crude for petrol swaps, as some of its oil production is committed to forward sale contracts. This complicates meeting its domestic supply commitments to local markets.