The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called for the establishment of a regional pricing index for crude oil and refined petroleum products as a pathway to energy security and investment optimisation in West Africa.
Speaking at the Global Commodity Insights Conference co-hosted with S&P Global in Abuja, NMDPRA Chief Executive Farouk Ahmed emphasised that the absence of a West African benchmark has undermined price transparency, discouraged investment, and slowed market efficiency.
“As a region, we must define our own pricing reality,” Ahmed said. “A regional price index will deepen market development, improve transparency, and secure supply chains.”
Region Still Heavily Dependent on Imports
Despite increased refining capacity in countries like Nigeria, Ghana, Senegal, Niger, and Côte d’Ivoire now producing a combined 1.335 million barrels per day West Africa remains reliant on imported gasoline.
2025 data presented at the conference show that West Africa trades about 2.05 million metric tonnes (MT) of gasoline every month. Imports account for 69% (1.44 million MT) of this volume, while regional refineries contribute only 31% (0.61 million MT).
Ahmed noted that although domestic capacity is growing, the structural inefficiencies tied to imported supply persist, exacerbated by the region’s continued use of international benchmarks like Northwest Europe, US Gulf Coast, and Singapore for fuel pricing.
“These benchmarks fail to reflect the logistics realities and market structure of Africa,” he added.
Nigeria Poised as Regional Hub
Ahmed highlighted Nigeria’s potential to lead the region’s pricing and distribution evolution, citing reforms under President Bola Tinubu’s administration including the Petroleum Industry Act (PIA) 2021 and downstream liberalisation as critical enablers.
With major projects such as the Dangote Refinery and the rehabilitation of state-owned facilities underway, Nigeria is repositioning itself as a refining and logistics hub for West Africa.
“Nigeria’s deep seaports and maritime infrastructure position it as a strategic distribution hub,” Ahmed noted.
Benchmarking for Market Confidence
To establish a regional pricing structure, the NMDPRA is working with S&P Global Commodity Insights to develop pilot indices for key petroleum products: Premium Motor Spirit (PMS), Automotive Gasoil (AGO), Aviation Turbine Kerosene (ATK), and Liquefied Petroleum Gas (LPG).
Ahmed believes a West African benchmark will drive market confidence, enhance price discovery, and encourage investment in infrastructure such as storage and distribution.
“Our aim is a transparent, data-driven energy market that reflects West Africa’s real operating costs and values,” he stated.
Citing the OPEC World Oil Outlook, he projected Africa would add 1.2 million barrels per day of refining capacity by 2030, with West Africa playing a dominant role in that expansion.