Naira to weaken as fuel importers increase dollar demand

What the report says

The Punch reported that Nigeria’s naira is expected to face fresh pressure against the US dollar as fuel importers step up foreign-exchange purchases to stock up on refined petroleum products. Citing a Reuters outlook published Thursday, the report said the naira, along with the Ghanaian and Ugandan currencies, could weaken in the coming week, while Kenya’s shilling and Zambia’s kwacha were seen as more stable.

According to the report, the pressure is linked to import licences issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which have allowed marketers to bring in refined fuel. The naira was quoted at N1,368 to the dollar in the official market on Thursday, compared with N1,383 a week earlier, while the parallel-market rate was around N1,420. A market participant cited by Reuters warned that front-loaded dollar buying by importers could increase depreciation risks.

The Punch also placed the currency outlook within a wider dispute over Nigeria’s downstream fuel policy. It reported concerns from operators that continued importation is adding to dollar demand even as domestic refining capacity rises. The Dangote Petroleum Refinery has objected to continued imports, while the Independent Petroleum Marketers Association of Nigeria urged the federal government to stop fuel importation, arguing that imported petrol is costlier than locally refined supply and worsens market volatility.

IPMAN spokesperson Chinedu Ukadike told The Punch that recent import licences had not reduced pump-price pressure as intended, claiming imported products were being sold at about N1,350 per litre and were roughly 20% costlier on an offshore basis than Dangote’s prices. The report noted, however, that some industry stakeholders do not want Dangote refinery to become the sole supplier, underscoring the policy tension between competition, fuel pricing and exchange-rate stability.