Fuel queues increases in FCT and across the country as scarcity persist

The federal capital is hit by fuel queues again as scarcity persist, Nigeria’s government will issue sovereign debt notes to gasoline importers as a guarantee of subsidy payments, after a lack of credit curbed their ability to purchase and led to shortages and long lines to buy fuel.

The notes will be issued for 185 billion naira ($921 million) of outstanding gasoline subsidies after the government paid 321 billion naira to fuel importers in December, Finance Minister Ngozi Okonjo-Iweala told reporters Tuesday in Abuja, the capital.

“We will be issuing sovereign debt notes to them so that the banks will know that the government has undertaken the obligation,” she said. “We also agreed to meet the foreign exchange and interest cost which they were agitated about.”

Nigeria, Africa’s largest oil producer, relies on fuel imports to meet more than 70 percent of domestic needs because of inadequate refining capacity. Its pays importers the difference between regulated prices and import costs. The slump in crude prices since June has hit the revenue of Africa’s biggest economy and most populous nation, which depends on the commodity for revenue.

The naira, Nigeria’s currency, has fallen 19 percent against the dollar over the past six months, pushing up import costs for the retailers.

Nigeria’s central bank is working with lenders to help speed up letters of credit to fuel retailers, Okonjo-Iweala said.

“There’s no need really for the queues to be forming the way they are,” she said. “There’s no need for panic buying.”