The state-owned oil company NNPC owed between $3-$6 billion in fuel debts in September when the payment backlog stretched over 300 days, or 10 months, trade sources said.

NNPC representatives came to London in July to assure suppliers that the company would pay off a significant portion of the backlog by the end of August.

Nigeria is Africa's top oil exporter but insufficient refinery capacity means that it relies on imports of fuels, mostly gasoline, for up to 85 percent of its oil product needs.

"I understand the figure was about $2.4 billion," said Michael Prest, chief executive of oil trading and exploration company Petrodel which delivers fuel to the Nigerian market, in reference to the size of the NNPC payment to suppliers.

He added that NNPC payments are now taking between 190-220 days, or between 6-7 months in addition to normal credit terms.

NNPC could not be reached for comment.

Two other trade sources with direct knowledge of the Nigerian downstream sector said NNPC has paid suppliers between $2-$2.5 billion of the total bill estimated at $3-$6 billion.

"A lot of people have been getting squeezed. The government stumped up some cash and that has calmed things down a lot," said an industry source, adding that the current surplus waiting time for payment was 7 months.

Demand for refined products in west Africa is expect to rise by 60 percent over the next decade largely on demand for motor fuels, making it one of the main hubs for future oil demand growth, according to oil consultancy CITAC.

But the cost of imports is also growing with spot gasoline prices in Europe — the source for most Nigerian imports — up around 9 percent so far this year.

Nigeria has four refineries with a total capacity of around 445,000 barrels per day but production has never reached that level because of sabotage and poor maintenance.

Africa's most populous country has in the past mainly relied on quarterly import tenders organized by NNPC to meet demand. This year, companies such as Singapore-listed Noble Group have bypassed official tenders and instead sold volumes directly to private Nigerian fuel importers.

The portion of fuels handled by NNPC has shrunk to around 50 percent of the country's requirements, down from around 70 percent at the start of the year, traders said.

A subsidiary of NNPC issued a tender for around 15-20 gasoline cargoes for December at the beginning of this month but it has not yet been awarded.