Nigeria reveals plans for petroleum products stockpile

Nigeria plans to create a national strategic petroleum products stockpile in 2025 to protect its economy from potential volatility in global markets, according to comments by the petroleum products regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

In a press briefing on April 15, the organisation’s head, Farouk Ahmed, said that the reserve would help mitigate supply shocks and enhance Nigerian energy security, according to Reuters.

Currently, Nigeria’s oil law requires the existence of such infrastructure despite the country having vast oil reserves. A lacklustre domestic refining scene and expensive imports contribute to fuel shortages, although the country’s newest and largest refinery – the 650,000 barrels per day (bpd) Dangote – is expected to resolve some of these issues if feedstock problems are ironed out.

The existence of such a plant – and numerous other rehabilitated ones, including Port Harcourt, Warri and Kaduna – should also prevent Nigeria from suffering from global fuel price fluctuations, and have already contributed towards lowering petrol imports from 50.8mn litres per day in September 2024 to 28.7mn litres per day in March.

Currently, Nigeria can maintain 30 days’ worth of petroleum product reserves, according to Reuters. However, Ahmed noted that the new National Strategic Stock – which mirrors the United States’ Strategic Petroleum Reserve – would be noticeably larger.

Despite this, the official did not reveal any specific volumes of the planned reserves.

Nigerian Petroleum Industry Law requires the NMDPRA to issue a bulk petroleum liquids storage licence to private depots that hold product for long periods of time.

With new refineries active, the amount of processed fuel domestically is expected to lie at around 770,500 bpd in June, according to Reuters – presenting a significant opportunity for strengthening stockpiles. Indeed, the NMDPRA itself has highlighted the fact that the expansion of domestic refineries could eventually negate the need for fuel imports altogether.