In a move aimed at fortifying its energy security and shielding its economy from the volatility of international markets, Nigeria has announced plans to establish a National Strategic Petroleum Reserve this year. This initiative, unveiled by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) during a recent press briefing, seeks to address the nation’s persistent fuel supply challenges.
Farouk Ahmed, head of the NMDPRA, emphasized that the creation of this reserve, mandated by Nigeria’s oil law, is critical for mitigating supply shocks and enhancing the country’s energy resilience. “This National Strategic Stock, modelled on the United States’ Strategic Petroleum Reserve, will be significantly larger than our current reserves, which cover approximately 30 days of supply,” Ahmed stated. Although the precise volume of the planned reserve was not disclosed, the ambition underscores Nigeria’s determination to secure its energy future.
Nigeria, despite its status as a major oil-producing nation, has historically grappled with fuel shortages and lengthy queues at petrol stations. The government’s strategy to combat these issues hinges on expanding domestic refining capacity, with the 650,000-barrel-per-day Dangote Refinery playing a pivotal role.
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The impact of this increased domestic refining capacity is already being felt. According to NMDPRA data, gasoline imports have plummeted from 50.8 million litres per day in September to 28.7 million litres per day last month. “The startup of the Dangote Refinery, along with five smaller refineries, has significantly reduced our reliance on imported gasoline,” Ahmed noted. “Currently operational local refineries are projected to process 770,500 barrels per day until June, and we are optimistic that this expansion could eventually eliminate the need for gasoline imports altogether.”
Furthermore, the NMDPRA is actively engaging with private depots through the issuance of bulk petroleum liquids storage licenses, enabling them to hold products for extended periods. This regulatory framework aims to create a robust and decentralized storage network, enhancing the nation’s ability to withstand supply disruptions.
The establishment of the National Strategic Petroleum Reserve represents a significant step towards achieving energy independence for Nigeria. This initiative not only promises to stabilize domestic fuel supply but also to strengthen the nation’s economic resilience in the face of global market fluctuations. By leveraging its vast oil resources and expanding its refining capabilities, Nigeria is positioning itself to secure a more stable and prosperous energy future.
