Nigeria plans petroleum products’ stockpile

Nigeria has announced plans to establish a national petroleum products stockpile as a strategic move to address disruptions in the international market. The reserve is intended to cover more than the current 30-day supply in the country, providing a safety net against abrupt price shocks and volatility. Chinnan Dikwal, Vice Chair of the African Energy Council, highlighted the significance of this development, drawing parallels between Nigeria's initiative and the United States' Strategic Petroleum Reserve. The aim is to enhance energy security and insulate the country's economy and consumers from the impact of fluctuating crude oil prices. The move comes in the wake of the removal of fuel subsidies, signaling a shift towards a more market-driven approach. Dikwal emphasized the importance of integrity and transparency in the process of selecting private depots to store the reserves, stressing the need for stringent monitoring and auditing to prevent any malpractices. While specific details such as the volume and duration of the stockpile are yet to be finalized, the government is actively working on delineating a comprehensive framework. The recent price cuts by Dangote Refinery have injected further dynamics into the market, fostering competition and benefitting consumers by driving down fuel prices. The liberalized market environment is heralding a new era of cost efficiency and market competitiveness, marking a departure from the era of heavy subsidies. The successive reductions in ex-depot prices by the refinery have underscored the positive impact of market-driven pricing, empowering consumers with lower costs and enhanced choices. Overall, the establishment of the stockpile coupled with market reforms is poised to fortify Nigeria's energy sector and foster a more resilient economy amidst global uncertainties.