Nigeria fuel distribution resumes but disruption persists

LAGOS (Reuters) - Fuel supplies slowly resumed in Nigeria on Tuesday after a strike by fuel marketers was called off, but long queues at petrol stations and interruptions to businesses persisted in Africa's biggest economy and oil producer. The dispute, which ended on Monday, brought much of Nigeria to a standstill as private generators that produce most of the electricity for the nation's 170 million inhabitants ran out of fuel, days before the inauguration of Muhammadu Buhari as the new president on May 29. Nigeria subsidizes gasoline and must import the bulk of the 40 million litres a day that it consumes owing to a neglected refining system. A dilapidated power grid means businesses and households depend on diesel for electricity. Fuel importers said they were owed money by the government and shut depots to press their case. Besides airlines, which could not obtain aviation fuel, phone companies such as MTN Group and domestic banks had ground to a halt for lack of electricity. MTN said on Tuesday that its Nigerian services continued to be hampered despite the end of the fuel strike. "Diesel is still not easily available at this time...It is likely to take some time for normality to be restored," Funmilayo Onajide, a spokeswoman for the company, said. Some banks said their opening hours had returned to normal after being forced to close early on Monday. Nigeria is experiencing its worst fuel crisis in history, said Gaimin Nonyane, an economist at Ecobank, and there was a likelihood of a recurrence after the strike was resolved. "It will also increase uncertainty as the new government takes up office, prompting investors to reduce their holdings of Nigerian-denominated assets," he said. A delayed return to normality was evident on the streets of commercial hub Lagos and the capital, Abuja, where drivers lined up for several hours at petrol stations. "We are just queuing up hoping that the station will get its supply today since they called off the strike yesterday," said taxi driver Akin Olatunde. Fuel importers said they are owed around $1 billion by the government and had shut depots to press their case for fear that the incoming government may not pay the debt. Buhari is expected to closely review the subsidy scheme, which was revealed to have paid out over $6 billion in fraudulent claims in 2012. (Reporting by Alexis Akwagyiram, Chijioke Ohuocha in Lagos and Julia Payne, Camillus Eboh and Abraham Terngu in Abuja; Editing by James Macharia/Mark Heinrich)