Well the Romulan warships use a trapped singularity for their warp drives instead of the M/AM reactors of the Federation, so they would need a way to generate them as opposed to find and trap them in the wild. That would necessitate them having some sort of technology to generate them. The red matter could be the latest revision of that technology, originally intended as an olive branch from the Vulcans to the Romulans.
This technology would alleviate the need to generate a new singularity as ships come off the line, possibly removing a time consuming, resource heavy or environmentally damaging industry. With that much red matter, the Romulans could also rebuild from their losses during the Dominion War faster. Especially if the process of generating singularities causes them to have a much lower build rate for warp capable than the Federation or Klingons, they may look to destabilize their neighbors through intrigue to maintain their dominance.
Allowing them to "Catch Up" to their neighbors with this limited supply of red matter would head off attempts to destabilize the Federation and their neighbors.