ABUJA - Nigeria's state oil corporation NNPC is proposing hiking fuel prices to as high as 557 naira ($1.21) per litre from 189 naira, according to a circular it sent to fuel stations, seen by Reuters on Wednesday.

The circular came after panic buying caused prices to jump to about that level as Nigerians rushed to fill their tanks ahead of the expected end of a government subsidy that had been keeping prices low.

NNPC's spokesperson declined to comment.

Nigeria's new President Bola Tinubu said during his inauguration speech on Monday that the subsidy would be scrapped in addition to reforms to the country's multiple exchange rates, triggering the rush to petrol stations.

On Tuesday, NNPC's chief executive said the government could no longer afford to pay for the subsidy, giving rise to a perception that it was about to end, as opposed to ending in a few weeks' or months' time.

($1 = 460.0000 naira)

(Reporting by MacDonald Dzirutwe; Writing by Chijioke Ohuocha Editing by Estelle Shirbon)