The central bank of Nigeria has asked banks to submit bids for a “special currency auction” targeting fuel importers.
According to traders on Monday, the auction was to meet demand for matured letters of credit.
Business Times gathered from traders that the central bank sent a message to banks on Monday to submit backlog dollar demand from fuel importers by 1500 GMT for a special intervention.
Nigeria consumes 45 million litres of gasoline a day, or roughly 280,000 barrels, which would require the market to provide some $18 million a day.
Importers cover about 30 percent of this, with the state oil firm covering the rest, which is a big strain on the market for dollars.
Nigeria has four refineries but because of decades of neglect, the country imports petroleum products to meet the needs of its teeming population.
Nigeria produces between 2.2 million barrels of oil per barrel and 2.8 million b/d but its citizens consume 20 million barrels per day.
Traders said the government wanted to ensure that fuel retailers had enough products during the Christmas and New Year celebration, so it would arrange some dollars to them to avoid shortages.
However it was not clear at what rate the central bank would sell the dollars.
In May, the federal government entered into a deal with oil firms in Nigeria to sell their dollars directly to fuel importers, to end months of scarcity partly caused by a currency shortages after it hiked fuel prices by 67 percent, using an exchange rate of 285 naira per dollar.
According to a document obtained from OPEC, Nigeria which is a majorly oil-based economy, spent the sum of $53,087 on oil imports in 2015.
On the other hand, the country earned lesser in crude export to the tune of $45,365 in 2015.


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