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By Adewale Sanyaolu
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has called for the establishment of an African fuel price benchmark.
Chief Executive Officer (CEO) of NMDPRA, Mr. Rabiu Umar, stated this on Thursday, ahead of the second West Africa Refined Fuel Conference scheduled for August 11 and 12 in Abuja, with the theme: “Funding West Africa Infrastructure & Distribution to Create a Transparent Market for Regional Price Benchmarks.”
Umar argued that the continent could no longer continue to rely on pricing indices determined outside its borders despite its growing refining capacity.
The NMDPRA boss said Africa remains one of the world’s largest producers of crude oil, yet prices for much of its refined petroleum products are still benchmarked against international indices in Europe, the United States and the Gulf, describing the development as inconsistent with the continent’s expanding role in global energy markets.
Umar said every major energy-producing region already operates a recognised pricing benchmark, adding that Africa should establish its own reference market to improve price discovery, deepen regional trade and attract investment.
“Every region in the world today has its own pricing benchmark. Whether you’re talking about Europe, America, the Mediterranean or the Gulf countries, there is a trading index that reflects the realities of that region and Africa should not be an exception.”
He explained that regional benchmarks take account of local demand and supply dynamics, transportation costs and logistics, enabling prices to reflect market realities rather than external conditions.According to him, Europe’s Amsterdam-Rotterdam-Antwerp (ARA) trading hub has become the continent’s principal pricing and supply centre, providing a model that West Africa should emulate.
“The whole point of having a regional pricing benchmark is to create a hub where activities within a region are concentrated. That improves market discovery and ensures prices accurately reflect regional realities,” he said.
Umar noted that the rapid expansion of refining capacity across Africa, particularly with facilities such as the Dangote Petroleum Refinery has strengthened the case for creating a continental pricing benchmark.
