West African energy regulators are stepping up plans for a regional fuel pricing benchmark and trading hub, betting that a wave of new refining capacity led by Nigeria's Dangote refinery can give Africa a greater role in fuel price discovery and trade, Nigeria's regulator said on Tuesday.
- Speaking at the regional refined fuel market conference, Rabiu Umar, chief executive of Nigeria's Midstream and Downstream Petroleum Regulatory Authority, said the start-up of the 650,000 bpd Dangote refinery in 2024 was reshaping regional fuel supply chains and strengthening the case for a West African pricing and trading ecosystem independent of foreign benchmarks.
- "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.
- The regulator said West Africa had made progress towards establishing a regional refined-products benchmark market, citing closer collaboration with S&P Global Commodity Insights.
- Umar said efforts to align regional fuel pricing and regulation had gained ground over the past year, but warned that inadequate infrastructure, weak logistics and limited market transparency still stood in the way of a credible hub.
- The regulator said a regional trading hub would require investments in pipelines, storage, marine logistics and digital trading systems to improve fuel flows and market liquidity.
- Regulators urged West African countries to harmonise fuel standards, licensing and trade rules, warning that regulatory fragmentation was inflating the cost of regional energy trade.
Reuters