The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is pushing to establish a native African reference price benchmark for refined petroleum products, a move aimed at ending the continent’s reliance on foreign pricing indices and reflecting local market realities.

Rabiu Umar, Authority chief executive (ACE) NMDPRA stated this in Abuja on Thursday, stating that He said that while Africa produces significant volumes of oil and gas, yet much of the pricing for our commodities is determined outside the continent.

“Whether you’re talking about Europe, Northwest Europe, or America, they have their own benchmarks. Whether you talk about the Mediterranean or you go to the Gulf countries, everywhere you go, there’s a trading index. It is a global index, but there is a specific index for that region.

“Why does it exist? Because the process for pricing starts with price discovery, and it takes a lot of elements into consideration. For example, demand and supply, what is the logistics cost to bring the product into that region? All that goes into defining the reference price.”

Umar explained that Europe has successfully developed the Amsterdam-Rotterdam-Antwerp trading hub, which serves as the principal pricing and supply centre for much of the continent. Emphasizing that West Africa should pursue a similar model to strengthen regional trade and improve price discovery.

According to him, the growth of refining capacity across Africa had made the establishment of a regional benchmark even more urgent.

“If you look at Europe, Europe has ARA, which is Amsterdam, Rotterdam and Antwerp as the trading hub. But the whole of Europe, most of Europe gets supplied from there because that’s a hub. The whole point of having a regional pricing is to be able to create a hub where all the activities within a given region are going to be coming out of that place.

“It has a lot to do with logistics cost, how much it costs to bring in the product, whether you have more supply than demand or more demand than supply. All that that goes into improving market discovery and arriving at a price that is right for the market,” he said.

The ACE also identified infrastructure as a major enabler of an integrated regional petroleum market, noting that increased refining alone would not guarantee efficient supply without investments in transportation and logistics.

For him, infrastructure in oil and gas is the single most important aspect, this is as he stressed that a country can produce anything but inability to get it out to the market, poses a problem.

He cited the West African Gas Pipeline as an example of infrastructure that has enhanced regional energy integration.

“Today we have a gas pipeline going through West Africa. What that means is that you can produce gas in Nigeria and you can collect gas in Ghana, or Togo, or Benin Republic. Without that investment, you will not be able to create the momentum that you require.”

According to him, inadequate ports, shallow draft depths and limited pipeline networks continue to constrain petroleum trade across the region.

“If you don’t have the right size of ports, you don’t have the right depth of drafts, then big vessels cannot come, which means that you have to allow smaller ones. Where you do not have a pipeline, that also limits your ability to move things around.”

He also called for harmonised fuel quality specifications across African countries, saying inconsistent standards remain one of the biggest barriers to cross-border petroleum trade.

“If the product used in Nigeria is materially different in terms of specification from the one used in a neighbouring country, then it’s difficult for you to have interchange or to have products move from one place to another.”

Umar, speaking further, hinted on the planned conference by the NMDPRA in conjunction with S&P Global Commodity Insights and West Africa Regulator Forum (WARF), aimed to foster a high-level dialogue around building an integrated, resilient and sustainable refined market in Africa.

Tnrough the conference, Umar said african leaders will explore pathways for establishing a credible African reference price benchmark that reflects regional market realities and supports transparent pricing mechanisms.

The conference, scheduled for August 11 and 12 in Abuja, will facilitate the exchange of knowledge and insights on current market dynamics, evolving trends, and emerging opportunities within the African energy sector.

“Identify critical infrastructure gaps and highlight strategic investment opportunities to strengthen the continent’s refining and downstream value chain, promote collaborative frameworks and partnerships that enhance market transparency, improve efficiency, and strengthen security of supply across Africa.

“Explore pathways for establishing a credible African reference price benchmark that reflects regional market realities and supports transparent pricing mechanisms.

Examine strategies for expanding and modernizing refining capacity across the continent to improve energy security, reduce import dependence, and drive sustainable economic growth,” he added.