Nigeria's Strategic Petroleum Reserve: Shielding the Economy

Nigeria is set to establish a national petroleum stockpile to counter international market disruptions. Aimed at boosting energy security, the initiative involves building reserves akin to the U.S. Strategic Petroleum Reserve, relying on domestic refining capacity like the Dangote Refinery to limit imports.

The Nigerian government has announced plans to create a national strategic petroleum products stockpile this year, in an effort to protect its economy from international market fluctuations. At a press briefing, Farouk Ahmed, head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, outlined the initiative as a key strategy to enhance energy security.

The proposed reserve aims to mitigate supply shocks by expanding Nigeria's domestic refining capacity, notably highlighted by the 650,000-barrel-per-day Dangote Refinery. Despite being an oil-rich nation, Nigeria has faced persistent fuel shortages, often resulting in long queues.

Currently, Nigeria's reserves are only sufficient for approximately 30 days, but officials plan to establish a significantly larger national strategic stock. The initiative is modeled on the United States' Strategic Petroleum Reserve, yet officials have yet to reveal the exact future volume.

(With inputs from agencies.)