CBN Releases $1.259bn to Oil Sector Players for Petroleum Imports

Th Central Bank of Nigeria (CBN) has released $1.259 billion to oil sector operators to facilitate the importation of petroleum products, in a bid to stabilise fuel supply and ease pressure on the naira.

The apex bank said the intervention was part of ongoing efforts to ensure the availability of petroleum products in the country, support the deregulated downstream oil sector, and address foreign exchange liquidity challenges that have hampered fuel imports in recent months.

FCTA To Sanction Parents, Schools Obstructing Immunisation Exercise

In a statement issued on Sunday in Abuja, the CBN disclosed that the funds were released to a mix of oil marketing companies, depot operators, and importers to enable them to settle outstanding obligations and fund new import transactions.

The release of the $1.259 billion, the bank said, was aimed at preventing further fuel shortages and reducing the volatility in pump prices triggered by the scarcity of foreign exchange and rising global oil prices.

“The Central Bank of Nigeria remains committed to ensuring that strategic sectors of the economy, including energy and petroleum, have adequate access to foreign exchange for critical imports,” the statement read.

“This measure is intended to ease liquidity constraints in the downstream oil sector, enhance product availability, and stabilise domestic prices.”

Background to the Intervention

Nigeria has been facing persistent fuel importation challenges since the removal of fuel subsidies in mid-2023 and the unification of the foreign exchange market, which led to a steep depreciation of the naira.

Despite being Africa’s largest crude oil producer, Nigeria relies almost entirely on imported refined petroleum products due to inadequate domestic refining capacity. With the naira losing significant value against the dollar, oil marketers have struggled to source foreign exchange from the open market, leading to reduced import volumes and periodic fuel scarcity.

The latest CBN intervention, therefore, comes as a lifeline to the sector at a time when local fuel prices have risen sharply, transportation costs have increased, and inflation continues to surge.

The CBN noted that the intervention aligns with President Bola Tinubu’s directive to stabilise key economic sectors and cushion the impact of the reforms on consumers and businesses.

Stakeholders Commend the Move

Oil marketers, under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), commended the CBN’s move, describing it as timely and necessary to address the challenges of dollar scarcity and import bottlenecks.

In a joint statement, the associations noted that the release of foreign exchange would enable marketers to import products at more predictable costs, thus improving supply and reducing volatility in the downstream market.

“We welcome this intervention by the Central Bank as it will help ease the difficulties marketers have faced in accessing forex. With adequate and timely funding, we can ensure that products are available and that the market remains competitive,” MOMAN said.

They, however, urged the CBN to make such interventions consistent and transparent, stressing that sustainability is key to restoring stability in the petroleum supply chain.

Impact on Fuel Prices and Supply

Analysts say the release of $1.259 billion could help reduce the frequency of fuel shortages and ease price fluctuations, especially as the country prepares for increased fuel demand towards the end of the year.

Energy economist Dr. Kelvin Eromosele said the intervention would “buy time” for the government as it works on structural reforms in the oil sector, including the operationalisation of the Dangote Refinery and the rehabilitation of the state-owned Port Harcourt and Warri refineries.

“This injection of forex will definitely improve import flows and reduce immediate supply pressure. However, it is not a long-term solution. Nigeria must prioritise refining locally to end this recurring dependence on imported fuel,” he said.

He added that unless the local refining capacity comes on stream and the naira strengthens through increased export earnings, interventions like this would only provide short-term relief.

CBN’s Broader Forex Strategy

The CBN has recently introduced several measures to improve dollar liquidity in the economy. These include the clearance of verified forex backlogs owed to airlines, manufacturing firms, and other sectors; increased dollar inflows from remittances; and collaboration with the Nigerian National Petroleum Company Limited (NNPCL) to manage oil export proceeds more transparently.

Last month, the apex bank announced it had paid over $2 billion of verified FX backlogs, signalling progress in rebuilding confidence among investors and foreign partners.

According to the CBN, the bank is determined to restore normalcy to the foreign exchange market and eliminate speculative pressures that have contributed to the naira’s volatility.

“We are committed to a market-driven, transparent, and stable FX framework that supports productive sectors of the economy while curbing excesses and ensuring accountability,” the bank added.

Outlook

The CBN’s latest move is expected to boost fuel availability, support logistics operations, and moderate inflationary pressures linked to energy costs. However, experts warn that without sustainable forex inflows, the relief may be temporary.

As Nigeria awaits the full commencement of operations at the Dangote Refinery — which is projected to refine 650,000 barrels per day — and the completion of ongoing rehabilitation of public refineries, the reliance on imported fuel is likely to persist in the short term.

For now, the $1.259 billion forex injection signals a decisive effort by the CBN to stabilise the downstream petroleum market and reassure Nigerians of the government’s commitment to economic stability and energy security.