West Africa needs own fuel price benchmark, says NMDPRA

West Africa needs its own pricing system for refined petroleum products, independent of crises in Europe, according to Nigeria's petroleum regulatory authority. Rabiu Umar, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stated that geopolitical issues in Western Europe or the Mediterranean should not automatically dictate prices across Africa.

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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.

Speaking at the second West Africa Refined Fuel Market Conference in Abuja, Umar emphasized that pricing should be based on factors within the African market, such as local demand, supply, and logistical complexities. "If we have a problem, it is reflected in the pricing. If we don’t have a problem, then we are to be shielded to an extent, I would say, from what is going on in other locations," he explained.

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There may be issues which have absolutely nothing to do with what is going on here. And prices should be determined on the basis of geopolitical issues, demand and supply, and complexities within the market.

The push for a regional benchmark aims to create a transparent price discovery system specific to West Africa. Umar noted that while last year focused on establishing a foundation, this year's priority is execution. He stressed that this initiative is not about isolating Nigeria from the international market but ensuring prices accurately mirror the realities of the served market.

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So we feel this is a great opportunity for Africa, and West Africa in particular, to really have something that is specific to us.

Achieving this requires a comprehensive roadmap, including reliable financing, sufficient refinery capacity, robust logistics and storage networks, interconnected infrastructure like ports and pipelines, harmonized product regulations, transparent market data, and stronger cross-border cooperation. Umar cautioned that regulatory cooperation alone is insufficient to build a functioning trading hub.

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If we have a problem, it is reflected in the pricing. If we don’t have a problem, then we are to be shielded to an extent, I would say, from what is going on in other locations.