By Benson Daniel
The Nigerian Midstream and Downstream Petroleum Regulatory Authority has called on Nigeria and other West African countries to reduce their reliance on foreign fuel price benchmarks and develop a regional pricing system that reflects the realities of local markets.
The regulator said the continued use of international benchmarks for petroleum products exposes African consumers and businesses to external market conditions that may not accurately reflect supply, demand, refining capacity, transportation costs and inventory levels within the region.
The call was made as stakeholders gathered for the second West Africa Refined Fuel Conference, where discussions focused on strengthening regional fuel markets, improving price transparency and increasing investment in petroleum infrastructure.
NMDPRA Chief Executive Officer, Rabiu Abdullahi Umar, said the growth of refining capacity across Africa had made it increasingly important for the region to establish its own transparent reference price for refined petroleum products.
He noted that major energy markets around the world operate their own pricing indices, arguing that West Africa should develop a similar mechanism as domestic and regional refining capacity continues to expand.
The proposed regional benchmark is expected to take into account local supply and demand conditions, available inventories, refining output and logistics costs. Such a system could provide a more accurate reflection of the actual market conditions facing consumers and businesses across West Africa.
The initiative has gained greater relevance with the expansion of refining capacity in Nigeria, particularly the growing output from the Dangote Petroleum Refinery and other facilities. Increased local production has created opportunities for Nigeria to supply refined petroleum products to neighbouring countries and reduce the region’s dependence on imported fuels.
Umar said the development of a regional pricing mechanism would also require significant investment in infrastructure, including pipelines, storage facilities, marine terminals, ports, rail networks and digital commodity trading platforms.
According to the regulator, improved infrastructure is essential for reducing logistics costs, strengthening fuel security and facilitating the movement of petroleum products across national borders.
The NMDPRA is also pushing for greater harmonisation of fuel quality standards across African countries. Common standards would make it easier for petroleum products to move between countries and support the development of a more integrated regional market.
The regulator said previous engagements among regional authorities and industry stakeholders had recorded progress towards aligning petroleum product specifications, creating a foundation for deeper cooperation.
A regional benchmark could also strengthen price discovery and market transparency while encouraging investors to commit capital to refining, storage, transportation and other downstream infrastructure.
However, the success of the initiative will depend on sustained coordination among West African governments, regulators and industry operators. Differences in regulations, infrastructure gaps and varying levels of refining capacity remain significant challenges to creating a fully integrated regional petroleum market.
For Nigeria, the development of a regional fuel pricing mechanism could strengthen its position as a major supplier of refined petroleum products within West Africa while supporting the government’s broader objective of transforming the country from a crude oil exporter into a stronger participant in the refined petroleum market.
The move also reflects a broader effort by African countries to retain greater value from their natural resources by processing commodities locally and developing markets that are better connected to the continent’s own economic realities.
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