West Africa Needs Own Fuel Price Benchmark — NMDPRA

The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has called for the development of a regional benchmark for refined petroleum products in West Africa.

The Authority’s Chief Executive, Rabiu Umar, said this on Tuesday at the second West Africa Refined Fuel Market Conference in Abuja, where regulators, refiners, traders, financiers and other industry stakeholders discussed efforts to establish a transparent regional pricing system.

Umar, who is also chairman of the West Africa Regulator Forum, argued that petroleum prices in Nigeria and other African countries should not automatically be determined by crises in Western Europe or the Mediterranean.

He said West Africa needed a pricing mechanism that reflected its own supply, demand, inventory, logistics, refining and trading conditions.

According to him, the proposed benchmark would not isolate the region from the international petroleum market but would ensure that local market realities were properly reflected in regional prices.

“If we look at the refining capacity on the continent and how it has been increasing, it simply doesn’t make sense that if there is a problem in Western Europe or in the Mediterranean, it is going to affect our pricing in Africa,” Umar said.

He said the initiative had moved beyond discussions, stressing that stakeholders must now focus on implementation.

“Last year, our focus was on establishing the foundation. This year, our focus must be on execution,” he said.

Umar identified financing, refinery capacity, storage and logistics networks, ports, roads, railways and pipelines as key requirements for developing a functional regional fuel market.

He also called for harmonised petroleum regulations, common product standards, transparent market data and stronger cross-border cooperation.

The NMDPRA boss noted that differences in fuel specifications across West African countries remained a major obstacle to regional trade.

He stressed that a credible benchmark would require more than publishing reference prices, noting that physical infrastructure, market liquidity and reliable information were essential to creating an effective trading hub.

Speaking at the conference, Vera Blei, Head of Platts at S&P Global Energy, said West Africa had made progress towards developing credible refined-product price references.

She, however, urged market participants to take ownership of the proposed benchmark by creating the liquidity needed for it to become a reliable regional pricing reference.