Farouk Ahmed, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), disclosed at a press briefing that the establishment of this reserve is mandated by Nigeria's petroleum industry law. He emphasized that the strategic stockpile would serve as a crucial buffer to mitigate potential supply shocks and bolster the nation's overall energy security.
Despite being a major oil-producing nation, Nigeria has frequently grappled with fuel shortages and the resulting long queues at filling stations. The country's strategy to build resilience against global supply fluctuations hinges significantly on expanding its domestic refining capacity, most notably with the commencement of operations at the massive 650,000-barrel-per-day Dangote Refinery.
While Nigeria currently maintains petroleum product reserves sufficient to cover approximately 30 days of supply, Ahmed indicated that the envisioned National Strategic Stockpile would be considerably larger, drawing a parallel to the United States' Strategic Petroleum Reserve model. However, he did not provide specific details regarding the target volume of the planned reserves.
Nigeria's Petroleum Industry Act (PIA) mandates the NMDPRA to issue bulk petroleum liquids storage licenses to private depot operators capable of holding products for extended periods, facilitating the strategic storage initiative.
Recent progress in domestic refining capacity has already begun to impact Nigeria's reliance on imports. The startup of the Dangote Refinery in September, alongside the operation of five smaller refineries, has led to a substantial reduction in gasoline imports. Data from the NMDPRA shows a decrease from 50.8 million litres per day in September to 28.7 million litres per day last month.
Furthermore, data from the regulatory body projects that currently operational local refineries are on track to process a combined total of 770,500 barrels per day until June. The NMDPRA expressed strong optimism that the ongoing expansion of Nigeria's domestic refining capabilities could eventually eliminate the country's dependence on gasoline imports altogether, marking a significant step towards energy independence and economic stability. The establishment of the national strategic petroleum reserve will further solidify this progress by providing an additional layer of security against unforeseen global market disruptions.