The Federal Government has called for the creation of a West African benchmark for refined petroleum products, saying fuel prices in the region should be driven more by local market conditions than by disruptions in distant markets.
The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Rabiu Umar, made the call on Tuesday at the second West Africa Refined Fuel Market Conference in Abuja.
Umar argued that events in Western Europe and the Mediterranean should not automatically translate into higher petroleum prices across Africa when such developments have little connection with the region’s supply and demand situation.
According to him, the expansion of refining capacity in Africa, particularly Nigeria’s emergence as a major supplier of refined products, makes it increasingly necessary for West Africa to develop a pricing system that reflects its own market fundamentals.
He said a regional benchmark would allow prices to respond more directly to factors such as local supply, demand, geopolitical developments and product availability.
Umar said the initiative would require more than simply establishing a reference price. He identified adequate financing, refinery capacity, storage facilities, transportation networks, interconnected ports and pipelines, reliable market information and stronger regulatory cooperation as essential components of a functioning regional market.
He also urged West African countries to avoid building identical infrastructure independently, arguing that regional cooperation would allow countries to concentrate investment on areas where they have competitive advantages.
Another challenge he highlighted was the difference in petroleum product specifications across West African countries.
Umar said varying standards make it harder to move refined products across borders and could limit the development of an integrated regional market. He therefore advocated greater compatibility in regulations and product standards to facilitate cross-border trade.
The NMDPRA chief also stressed the importance of transparent and reliable market data, saying a credible benchmark could only emerge where information on supply, demand, inventories, infrastructure and actual transactions is readily available.
He said investors would be more willing to commit funds to regional petroleum infrastructure when projects are commercially viable, risks are clearly understood and regulations are predictable.
The roadmap for the development of the West African refined fuel market, according to Umar, will focus on improving the movement of petroleum products, financing strategic infrastructure, aligning product standards, strengthening market transparency and establishing a complete trading ecosystem.
He said the goal was to transform West Africa from a region that largely relies on prices determined elsewhere into a significant centre for petroleum trading, investment and price discovery.
Umar noted that the region had already developed a roadmap and that the priority in 2026 should be financing and implementing the plans.
He said successful implementation would ultimately lead to more efficient product distribution, stronger supply security, increased investor confidence, expanded regional trade and prices that better reflect West Africa’s own market realities.
