OIL IMPORTERS’ DOLLAR DEMAND JUMPS 115% DESPITE RISING LOCAL PRODUCTION

Foreign exchange demand from oil importers in Nigeria has risen by 115 per cent, despite improvements in local crude oil production, highlighting continued pressure on the country’s foreign exchange market.

The increase in demand comes as the downstream petroleum sector continues to rely on imported products to meet domestic consumption needs, even as efforts are being made to strengthen local refining capacity.

Industry stakeholders said the surge in dollar demand could put additional pressure on the naira and increase the cost of importing petroleum products, depending on movements in the foreign exchange market.

Nigeria has been working to reduce its dependence on imported refined petroleum products through investments in domestic refining and efforts to improve crude oil supply to local refineries.

However, analysts noted that increased local crude production does not automatically eliminate the need for foreign exchange, particularly where refined products, equipment, services, and other inputs are sourced internationally.

The development comes amid broader concerns about the relationship between fuel imports, foreign exchange availability, and domestic pump prices.

Economic experts say reducing the country’s exposure to imported petroleum products will require sustained investment in refining infrastructure, stable crude supply, and efficient distribution networks.

They added that stronger domestic refining capacity could eventually reduce foreign exchange requirements for fuel imports and ease pressure on the currency.

The latest figures highlight the continued importance of Nigeria’s energy transition and downstream reforms in reducing dependence on imported petroleum products.