Naira Under Pressure as Fuel Importers Stock Up on Dollars
The Nigerian naira is bracing for a fresh wave of depreciation against the US dollar, driven by a surge in demand for foreign exchange from fuel importers who are building inventories after securing import licences. A Reuters survey of currency traders, released on Thursday, July 23, forecast that the naira would weaken over the coming week, alongside the currencies of Ghana and Uganda. The naira closed at N1,368 to the dollar in the official foreign exchange market on Thursday, compared with N1,383 the previous week, while in the parallel market it traded at roughly N1,420 to the dollar.
Traders Warn of Downside Risks as Importers Front-Load Purchases
One trader surveyed by Reuters said importers were buying dollars early in anticipation of higher fuel shipments. 'We expect the naira to come under pressure, with downside risks skewed toward a depreciation as fuel importers front-load dollar purchases to build inventories,' the trader said. This trend is already evident in the parallel market, where the naira has weakened past N1,400 per dollar for the first time in weeks, representing a roughly N46 premium over the official rate. The divergence reverses the near-convergence Nigeria achieved earlier in 2026 when the naira briefly traded around N1,370 to the dollar in February.
Dangote Refinery and IPMAN Criticise Fuel Import Policy
The Dangote Petroleum Refinery has been a vocal critic of the government's continued issuance of fuel import licences, arguing that local refining capacity can already cover a meaningful share of Nigeria's fuel needs. The refinery contends that bringing in petroleum products when domestic supply is available burns through the country's scarce foreign exchange reserves unnecessarily. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has also urged the Federal Government to reconsider its import policy. IPMAN's National Publicity Secretary, Chinedu Ukadike, said imported petrol is now retailing at prices well above what Dangote's refinery charges, which undermines the government's stated goal of using imports to drive competition and lower pump prices.
Imported Petrol Selling at N1,350 per Litre, Straining Naira
Ukadike revealed that some imported petrol is selling for around N1,350 per litre, a figure that significantly exceeds the rates offered by local refiners. He warned that the higher cost of imports feeds directly into greater dollar demand, putting additional strain on the naira at a time when the government is trying to build up foreign exchange buffers. He also questioned why fuel is being sourced from neighbouring countries when locally refined products are cheaper, saying the policy risks deepening exchange rate instability and raising costs across the downstream petroleum sector. Some industry stakeholders oppose a full ban on imports, maintaining that having multiple fuel suppliers is necessary to prevent monopolistic pricing and protect energy security.
Naira Depreciates Against US Dollar in Parallel Market
Earlier, Legit.ng reported that the naira is facing renewed pressure in the Nigerian forex market, especially in the parallel market. For the first time in weeks, the naira is now trading at the black market above N1,400 per dollar. The parallel market rate represents a roughly N46 premium over the official rate, a divergence that reverses the near-convergence Nigeria achieved earlier in 2026 when the naira briefly traded around N1,370 to the dollar in February.
