The 650,000-barrels-per-day Dangote Refinery is driving efforts by West African energy regulators to establish a regional fuel pricing benchmark and trading hub, as the region seeks greater influence over petroleum-product price discovery.
Rabiu Umar, chief executive of Nigeria’s Midstream and Downstream Petroleum Regulatory Authority, said the refinery’s start-up in 2024 had reshaped regional fuel supply chains and strengthened the case for a West African pricing and trading ecosystem independent of foreign benchmarks.
Speaking at a regional refined fuel market conference, Umar said Africa needed to move beyond its role as a price-taker in global petroleum markets.
“Africa must progress from being principally a price-taker in global petroleum markets to becoming an increasingly credible centre of price discovery, trading, investment and value creation,” he said.
West African regulators have made progress towards establishing a regional refined-products benchmark market, including closer collaboration with S&P Global Commodity Insights.
Umar said efforts to align fuel pricing and regulation across the region had gained ground over the past year, but infrastructure gaps, weak logistics and limited market transparency remained barriers to establishing a functioning regional hub.
The proposed market would require investment in pipelines, storage facilities, marine logistics and digital trading systems to improve the movement of petroleum products and increase market liquidity.
Regulators are also pushing for the harmonisation of fuel standards, licensing requirements and trade rules across West African countries.
They said regulatory fragmentation was increasing the cost and complexity of regional energy trade, limiting the ability of countries to benefit from growing refining capacity.
The development of Dangote Refinery, alongside other refining projects in the region, is expected to increase the volume of locally available petroleum products and create the supply base needed for a more integrated regional market.
A functioning benchmark could also give West African buyers and sellers a transparent reference price for refined products while reducing reliance on international pricing mechanisms.
Wasiu Alli is a business, economics cum data journalist with strong expertise covering macro trends, capital markets, government policies, corporate earnings and comparative economics analysis. Alli turns raw data into trends that not only tells compelling stories but nudges investors to make valued and informed decisions. He’s an alumnus of Lagos State University and trained at Lagos Business School. He formerly heads the Companies and Markets desk at BusinessDay where he writes and supervises the production of well researched articles on earnings updates, corporate sectoral comparisons, market intelligence as well as interviews with C-suite executives.
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