Joseph Bakare
Nigeria is laying strong foundation to achieve regional petroleum products pricing structure as countries in the African region continue to invest in refinery sector.
Leading the advocacy is the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) which has called for the establishment of an African fuel price benchmark, saying the continent should work out plan to develop its own regional pricing mechanism.
This according to the Agency will reflect its growing refining capacity, improve market transparency and reduce dependence on foreign pricing indices.
It went further to explain that every major energy-producing region in the world already operates a recognised pricing benchmark, stressing that Africa should not remain an exception as investment in refining, logistics and cross-border petroleum trade continues to grow.
The Chief Executive of NMDPRA, Rabiu Umar, who made the call in Abuja on Thursday ahead of the second West Africa Refined Fuel Conference, noted the importance of the conference which he said it would focus on attracting investment into infrastructure and logistics needed to establish a transparent and competitive West African petroleum pricing and trading hub.
He went further to emphasize that regional pricing benchmarks are critical because they reflect local market realities rather than relying solely on international indices.
“Every region in the world today has its own pricing benchmark. Whether you’re talking about Europe, Northwest Europe, or America, they have their own benchmarks. Whether you talk about the Mediterranean or you go to the Gulf countries, everywhere you go, there’s a trading index. It is a global index, but there is a specific index for that region.
Making further comparisons he said the process for pricing starts with price discovery, and it takes a lot of elements into consideration.
According to him, Europe has successfully developed the Amsterdam-Rotterdam-Antwerp trading hub, which serves as the principal pricing and supply centre for much of the continent.
In that regard West Africa should pursue a similar model to strengthen regional trade and improve price discovery.
“If you look at Europe, Europe has ARA, which is Amsterdam, Rotterdam and Antwerp as the trading hub. But the whole of Europe, most of Europe gets supplied from there because that’s a hub. The whole point of having a regional pricing is to be able to create a hub where all the activities within a given region are going to be coming out of that place.
“It has a lot to do with logistics cost, how much it costs to bring in the product, whether you have more supply than demand or more demand than supply. All that goes into improving market discovery and arriving at a price that is right for the market.”
Umar noted that the growth of refining capacity across Africa had made the establishment of a regional benchmark even more urgent.
“We are also looking at Africa, in a sense, moving towards its own refining. So the more we’re able to do our product, the more relevant it is to have our own reference pricing and then create that advantage, particularly within the West Africa region. Today, we have Lomé. Tomorrow, who knows, we may have that reference price move to Lagos or somewhere around there.”
He further stressed that infrastructure remained the biggest enabler of an integrated regional petroleum market, noting that increased refining alone would not guarantee efficient supply without investments in transportation and logistics.
“Infrastructure in oil and gas is the single most important aspect. You can produce anything you want to produce. If you cannot get it out to the market, there’s a problem. That infrastructure is what moves it across.”
He cited the West African Gas Pipeline as an example of infrastructure that has enhanced regional energy integration.
“Today we have a gas pipeline going through West Africa. What that means is that you can produce gas in Nigeria and you can collect gas in Ghana, or Togo, or Benin Republic. Without that investment, you will not be able to create the momentum that you require.”
In his assessment, inadequate ports, shallow draft depths and limited pipeline networks continue to constrain petroleum trade across the region.
“If you don’t have the right size of ports, you don’t have the right depth of drafts, then big vessels cannot come, which means that you have to allow smaller ones. Where you do not have a pipeline, that also limits your ability to move things around.”
He also called for harmonised fuel quality specifications across African countries, saying inconsistent standards remain one of the biggest barriers to cross-border petroleum trade.
“If the product used in Nigeria is materially different in terms of specification from the one used in a neighbouring country, then it’s difficult for you to have interchange or to have products move from one place to another.”
Responding to questions on fuel quality, Umar said Nigeria currently produces cleaner petroleum products than several countries in the region.
“There has been some work in relation to standardising the specification through ECOWAS as well as the Africa Refiners Association. Once a harmonious level is reached, we’ll then be able to have a single standard in terms of quality.
“Nigeria doesn’t produce anything above 50 BPM, to the best of my knowledge. Whatever we have produced in terms of what we are able to export is on spec. I would say it’s even of a higher quality than what some of the countries are bringing. In West Africa, you have people doing up to 200 BPM. Nigeria doesn’t do anything above 50 BPM. I can say that confidently.”
He commended Dangote Petroleum Refinery for strengthening fuel supply within Nigeria and neighbouring countries despite recent disruptions in the global oil market.
Umar said this year’s conference, organised in partnership with S&P Global Commodity Insights and the West Africa Regulators Forum, would build on outcomes from the maiden edition held last year.
According to him, the inaugural conference led to the establishment of the West Africa Regulators Forum, the publication of West African reference prices and the opening of S&P Global Commodity Insights’ regional office in Abuja.
He said the 2026 edition, themed “Funding West Africa Infrastructure & Distribution to Create a Transparent Market for Regional Price Benchmarks,” would focus on attracting investment into pipelines, storage terminals, marine infrastructure, logistics corridors, digital commodity exchanges and other critical assets needed to create a competitive regional petroleum market.
He said the gathering would build on the progress recorded since the inaugural edition and deepen efforts to establish a transparent regional petroleum pricing and trading hub for Africa.
Umar, noted that although Africa produces significant volumes of crude oil and gas, prices for much of its petroleum commodities are still determined outside the continent, underscoring the need for a regional benchmark.
“Last year in July, the NMDPRA in conjunction with S&P Global Commodity Insights inaugurated an annual Conference with the theme: West Africa Refined Fuel Market: Pathway to a Regional Reference Market. The conference was instituted to address a stark reality, that Africa produces significant volumes of oil and gas, yet much of the pricing for our commodities is determined outside the continent. This conference seeks to bring together regulators, investors, financial institutions, and industry leaders to develop practical solutions for investing in infrastructure and logistics that will support a transparent, competitive West African pricing and trading hub.
“The vision is to establish West Africa as a credible regional marketplace where petroleum products can be traded efficiently, transparently, and competitively. By strengthening infrastructure, harmonising regulations, and improving market data, the region can enhance price discovery, facilitate cross-border trade, and attract greater investment.”
According to him, the inaugural conference had already delivered tangible outcomes, including the establishment of the West Africa Regulators Forum, the publication of West African reference prices and the opening of S&P Global Commodity Insights’ regional office in Abuja.
“Within the year, significant progress has been made on key outcomes of the 2025 Conference, including the constitution of the West Africa Regulators Forum, publication of West Africa reference prices and the setting up of the S&P Global Commodity Insights Regional Office in Abuja. Pursuant to these successes, the NMDPRA is organising the second edition of the conference in collaboration with S&P Global Commodity Insights and the West Africa Regulators Forum, with the theme, ‘Funding West Africa Infrastructure & Distribution to Create a Transparent Market for Regional Price Benchmarks’.”
The conference, scheduled for August 11 and 12 in Abuja, will focus on attracting investments needed to strengthen Africa’s downstream petroleum value chain and lay the foundation for a credible regional pricing benchmark.
“The primary objective of the conference is to foster a high-level dialogue around building an integrated, resilient and sustainable refined market in Africa by facilitating the exchange of knowledge and insights on current market dynamics, evolving trends and emerging opportunities within the African energy sector; identifying critical infrastructure gaps and highlighting strategic investment opportunities to strengthen the continent’s refining and downstream value chain; promoting collaborative frameworks and partnerships that enhance market transparency, improve efficiency and strengthen security of supply across Africa; exploring pathways for establishing a credible African reference price benchmark that reflects regional market realities and supports transparent pricing mechanisms; and examining strategies for expanding and modernising refining capacity across the continent to improve energy security, reduce import dependence and drive sustainable economic growth.”
The NMDPRA added that investment opportunities at the conference would span the gas value chain, petroleum storage facilities, pipelines, marine terminals, LNG infrastructure, digital commodity exchanges, trading platforms, strategic petroleum reserves and logistics corridors, saying efficient infrastructure and reliable market data would be critical to improving regional integration, reducing supply costs and enhancing energy security across West Africa.
Africa remains one of the world’s largest producers of crude oil, yet prices for most of its petroleum products are largely determined using international benchmarks established outside the continent.
Stakeholders have long argued that developing an African pricing benchmark would improve price discovery, strengthen regional trade, reduce logistics costs and support the implementation of the African Continental Free Trade Area.
Nigeria, with expanding refining capacity driven by the Dangote Refinery and other domestic projects, is positioning itself to play a leading role in establishing a West African petroleum trading and pricing hub.