President Bola Tinubu's government last year opened gasoline imports to private firms but foreign currency shortages and a cap on the price of petrol has meant only NNPC remains the sole importer.
Gasoline is widely used in cars and to power generators by households and small businesses and any shortages have a ripple effect on the economy, which is grappling with the highest inflation rate in 28 years.
Some retail stations that had gasoline in Lagos and Abuja had raised the cost of a liter of petrol to as much as N840 naira (63 U.S. cents) compared to N617 naira (43 U.S. cents) which NNPC sells.
Oil marketers who lift fuel from NNPC, said they were not getting sufficient volumes to distribute around the country and are being told that logistics challenges were hampering supply.
Femi Soneye, NNPC spokesperson, said the state-oil firm had more than 1.5 billion liters of petrol, which was enough to last at least 30 days and that queues would end within days.
"Unfortunately, we experienced a three-day disruption in distribution due to logistical issues, which has since been resolved. However, as you know, overcoming such disruptions typically requires double the amount of time to return to normal operations," Soneye said, He admitted some outlets were taking advantage of this situation to maximize profits.
But the shortages are only a part of deeper problems that NNPC faces.
The firm NNPC has been unable to settle a backlog of around $3 billion to traders for imported fuel as the tumbling naira currency and rising global fuel prices have increased the effective subsidy it is paying. It denied owing fuel traders.
NNPC is also struggling to find enough crude to swap for gasoline as some of its oil production is tied to forward sale contracts. That also makes it difficult to meet its domestic supply obligations to local refineries like Dangote Refinery.