Yemisi Izuora
Nigeria is taking strategic action to checkmate disruptions in the global oil market.
To guard against domestic instability the Government plans to establish a national strategic petroleum products stockpile this year to safeguard its economy against disruptions in the international market, the petroleum products regulator said at a press briefing on Tuesday.
The head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Farouk Ahmed, said the reserve, which the country’s oil law mandates, would mitigate supply shocks and enhance the nation’s energy security.
Nigeria, despite its oil wealth, frequently experiences fuel shortages and long queues. The country aims to use expanding domestic refining capacity, particularly the 650,000-barrel-per-day Dangote Refinery, to build resilience against global supply fluctuations.
While Nigeria currently maintains petroleum products reserves to cover approximately 30 days of supply, Ahmed said the new National Strategic Stock, modelled on the United States’ Strategic Petroleum Reserve, would be significantly larger.
He did not specify the volume of the planned reserves.
Nigeria’s Petroleum Industry Law mandates the regulator to issue a bulk petroleum liquids storage licence to private depots that can hold products for as long as needed.
Startup of the Dangote Refinery in September, along with five smaller refineries, has significantly reduced Nigeria’s gasoline imports from 50.8 million litres per day in September to 28.7 million litresper day last month.
Data from the regulator indicate that currently operational local refineries are projected to process 770,500 bpd until June.
The regulator expressed optimism that refining expansion could eventually eliminate the need for gasoline imports.