SUMMARYThe problem of finite element simulation of incompressible fluid flow in porous medium is considered. The porous medium is characterized by the X‐ray microtomography technique in three dimensions. The finite calculus‐based stabilization technique is reviewed to implement the equal order finite element interpolation functions for both velocity and pressure. A noble preconditioner, the nodal block diagonal preconditioner, is considered whose performance is thoroughly investigated. Combining this preconditioner with a standard iterative solver during the computational homogenization procedure, it is possible to carry out the large‐scale fluid flow simulation for estimating permeability of the porous medium with reasonable accuracy and reliability. Copyright © 2013 John Wiley & Sons, Ltd.