…Farouk Ahmed champions regional benchmark to eliminate pricing inefficiencies, attract investment, and strengthen West Africa’s energy security.
By Francis Xavier
In a bold move to reshape the petroleum trading landscape in West Africa, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called for the creation of a continental pricing benchmark tailored to the African energy market.
Speaking during the opening session of the Global Commodity Insights Conference on the West African Refined Fuel Market in Abuja, the Authority’s Chief Executive, Engr. Farouk Ahmed, emphasized the urgent need to correct pricing inefficiencies and eliminate arbitrage opportunities that continue to plague the petroleum sector across the region.
Organized in partnership with S\&P Global Commodity Insights, the two-day conference brings together regulators, policymakers, industry experts, and investors to chart a new course for fuel pricing mechanisms in West Africa.
Ahmed noted that despite West Africa’s increasing refining capacity and strategic location, the region remains overly dependent on international benchmarks such as those from Northwest Europe, the US Gulf Coast, and Singapore, indices that fail to reflect Africa’s market peculiarities.
“It is time Africa developed its own pricing system—one that promotes real-time price discovery, supply chain visibility, and regional trade efficiency,” Ahmed declared.
He said establishing a regional reference pricing index would ensure:
* Greater transparency in fuel pricing,
* Growth in intra-African petroleum trade,
* Real-time data that reflects local market dynamics,
* Expansion of storage and supply infrastructure,
* Attraction of downstream investments via digital platforms and special trade zones,
* And a significant boost to energy security.
Ahmed disclosed that the West African region currently trades about 2.05 million metric tonnes of gasoline monthly, of which 69% is imported, while 31% comes from regional refineries in Nigeria, Ghana, Niger, Senegal, and Côte d’Ivoire. These countries boast a combined refining capacity of 1.335 million barrels per day, with projections for further expansion through 2030.
With projects at various stages of completion, Nigeria and its neighbours are poised to become refining powerhouses, reducing dependency on imports and increasing market liquidity.
Highlighting Nigeria’s strategic advantages, Ahmed said:
“Nigeria is rapidly evolving into a trade and logistics hub, thanks to its active maritime coastline, deep seaports equipped with modern infrastructure, and regulatory frameworks that align with global standards.”
He explained that the partnership with S\&P Global will allow NMDPRA to leverage world-class market intelligence and regulatory oversight to develop pilot pricing indices for products such as PMS, AGO, ATK, and LPG.
This initiative aligns with the bold reforms of President Bola Ahmed Tinubu, including the implementation of the Petroleum Industry Act (PIA) 2021, the liberalization of the downstream sector, and macroeconomic reforms to enhance Nigeria’s investment climate.
“Our shared goal is to eliminate price disparities, strengthen investor confidence, and institutionalize a transparent fuels market across West Africa,” Ahmed stated.
He urged regional stakeholders to rally behind the initiative, describing it as a strategic legacy that will power the continent’s energy future.
As the Abuja conference progresses, experts hope the groundwork laid here will ignite the development of Africa’s first regional fuel pricing index, one rooted in African realities and capable of transforming the energy sector across the continent.
