Downhole demulsification of crude oil increases well production and profitability by reducing vertical flow pressure loss. This paper presents a practical, field-tested method to accomplish downhole demulsification without the mechanical complexities of the conventional downhole injection system. Chemical is injected at surface with a pneumatic dosing pump into the gas lift stream. Lift gas entering into the tubing-casing annulus carries the chemical downhole to the injection point deep into the tubing and blends it with the well fluid to prevent emulsification. Production improves after a few days of chemical injection as the downhole demulsification process stabilizes. Successive trials have proved the effectiveness of the approach in terms of improved production. In view of the simplicity and cost effectiveness of the method, it has also been applied in naturally flowing wells that produce below their potential because of emulsion. Case study and result of such trial that shows promising success has broadened the application scope of the system to emulsion-infested natural flow wells.