By Cyril Ogar
Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called for pragmatic efforts to tackle pricing disparities and arbitrage inefficiencies in petroleum product trade across Africa by advocating for the establishment of a continental reference market for refined products.
Speaking in Abuja at the opening session of the Global Commodity Insights Conference on the West African Refined Fuel Market organised in partnership with S&P Global Commodity Insights, the Authority’s Chief Executive, Engr. Farouk Ahmed said the move is aimed at fostering price transparency, improving market development, and enhancing energy security across West Africa and beyond.
The two-day event convened industry leaders, policymakers, regulators, and investors to deliberate on frameworks for launching regional pricing indices. These indices will focus on refined products like Premium Motor Spirit (PMS), Automotive Gasoil (AGO), Aviation Turbine Kerosene (ATK), and Liquefied Petroleum Gas (LPG).
He maintained that despite being a significant producer of hydrocarbon resources, an important consumer of refined petroleum products and a growing refining hub, West Africa continues to depend on posted prices of global reference markets such as Northwest Europe (NWE), US Gulf Coast, Mediterranean, Singapore, Arab Gulf etc. for all its trading activities. While these benchmarks, are globally accepted, often they do not reflect the unique supply chain peculiarities, market dynamics, and economic realities of the African continent. 6. A regional pricing benchmark that promotes price discovery, transparency, deepened market development and enhanced availability of energy has then become a strategic objective that requires the collaborative action of all the stakeholders that are major players in this market. Establishing a regional pricing reference point would facilitate:
Growth of trading of petroleum products in the region, Establishment of additional storage and supply infrastructures to accommodate the growing volumes of trading activities Real-time pricing data that is reflective of the peculiarities of the West African market fundamentals Attracting downstream investments through various Trade Zones and digital market platforms Supply chain visibility and energy security across the region and beyond
Ahmed noted that while the region is a significant producer and consumer of petroleum products, it still relies heavily on international pricing benchmarks such as those from Northwest Europe, the US Gulf Coast, and Singapore indices that do not fully reflect the continent’s unique market dynamics and supply chain realities.
He said, “The West African region will make a significant contribution to this projection through new projects, upgrades and rehabilitation, which are currently at various levels of completion in the different countries.
“These increased refining capacities will improve the market liquidity of refined Petroleum products in the region. Nigeria is rapidly evolving into a midstream and downstream trade
and logistics center.
Nigeria has an active maritime coastline that links all West African markets, deep seaports with modern technologies and infrastructure, as well as regulatory frameworks that support World class standards of maritime operations. These factors have positioned the country as a viable hub in the West African energy sector.
“Our shared goal is to provide clarity, reduce arbitrage inefficiencies, and foster confidence in African pricing frameworks. These indices will be vital for bilateral contracts, lending, hedging, and investment decisions across the region. Let us institutionalize a sustainable system that empowers transparent fuels market transactions that support the investments of all players in this regional market.
He informed the visiting congregation that under the leadership of His Excellency, President Bola Ahmed Tinubu, GCFR, key policies and market development reforms have been implemented in Nigeria which is enabling the growth of the petroleum industry and attractive investment opportunities in the sector. These reforms include the implementation of the Petroleum Industry Act (PIA) 2021, full liberalization of the downstream sector, improving macro-economic environment, and ease of doing business.
The regional supply of fuels in West Africa has grown through improved refining capacities in Nigeria, Ghana, Niger, Senegal and Cote D’Ivoire which currently stands at 1.335 million barrels per day.
Our 2025 statistical data for fuel supply in the West African region reveals that 2.05 million MT per month of Gasoline is being traded, consisting of 1.44 million MT (69%) imports and 0.61 million MT (31%) refinery contribution from the region.
Furthermore, the 2025 OPEC World Oil Outlook projects 1.2 million barrels per day additional refining capacity in Africa, between 2025 and 2030.
The West African region will make significant contribution to this projection through new projects, upgrades and rehabilitations, which are currently at various levels of completion in the different countries. These increased refining capacities will improve the market liquidity of refined Petroleum products in the region.
Nigeria is rapidly evolving into a midstream and downstream trade and logistics center. Nigeria has an active maritime coastline that links all West African markets, deep seaports with modern technologies and infrastructure, as well as regulatory frameworks that support World class standards of maritime operations. These factors have positioned the country as a viable hub in the West African energy sector.
“It is time Africa developed its own pricing system one that promotes real-time price discovery, supply chain visibility, and regional trade efficiency,” Ahmed said.
Ahmed explained that a regional benchmark would support the growth of petroleum product trading within West Africa.
According to him, it would also encourage the establishment of additional storage and supply infrastructure to accommodate rising trading volumes.
Furthermore, he said this would provide real-time pricing data that better reflect the region’s market fundamentals.
The benchmark, Farouk added, is expected to attract downstream investments, particularly through trade zones and digital market platforms. It would also strengthen supply chain visibility and improve energy security across the continent.
According to the NMDPRA Boss, West Africa currently records a monthly gasoline trade volume of 2.05 million metric tonnes, with 69 percent imported and 31 percent produced by regional refineries in Nigeria, Ghana, Niger, Senegal, and Côte d’Ivoire.
These countries together have a refining capacity of 1.335 million barrels per day—a figure projected to rise with the completion of new and rehabilitated facilities between 2025 and 2030.
Ahmed also affirmed that Nigeria is rapidly evolving into a major petroleum trade and logistics hub in the region.
He cited the country’s active maritime coastline, modern deep-sea ports, and an enabling regulatory framework that supports world-class maritime operations.
“Our partnership with S\&P Global will leverage their world-class market intelligence and our regulatory expertise to launch pilot indices that accurately reflect the local pricing realities,” he said.
The initiative, he noted, aligns with President Bola Tinubu’s ongoing reforms in Nigeria’s petroleum sector, including the implementation of the Petroleum Industry Act (PIA) 2021, full deregulation of the downstream sector, and macroeconomic reforms aimed at improving the business environment.
Ahmed urged stakeholders to seize the opportunity to institutionalize a transparent and efficient pricing system, which he described as “a legacy of enduring prosperity for all.”
Our partnership with S&P Global Commodity Insights seeks to employ the Worldclass market intelligence, reliable data integrity and extensive experience in the development of market benchmarks by S&P and the regulatory expertise of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to launch pilot indices that capture refined product prices such as Premium Motor Spirit (PMS), Automotive Gasoil (AGO), Aviation Turbine Kerosene (ATK), and LPG in Nigeria and West African energy markets. 13. Our shared goal is to provide clarity, reduce arbitrage inefficiencies, and foster confidence in African pricing frameworks. These indices will be vital for bilateral contracts, lending, hedging, and investment decisions across the region. 14. Let us institutionalize a sustainable system that empowers transparent fuels market transactions which support the investments of all players in this regional market.
