Africa must move from being predominantly a price-taker in the global petroleum market to becoming a credible centre for price discovery, trading, investment and value creation, the Nigerian Midstream and Downstream Petroleum Regulatory Authority has said.
The Authority Chief Executive, Rabiu Umar, made the call at the second edition of the West Africa Refined Fuel Market Conference held on Tuesday in Abuja, where he stressed the need for massive investment in infrastructure, logistics, market transparency and operational efficiency to establish a regional petroleum pricing and trading hub.
The conference, which focused on funding West African infrastructure and distribution to create transparent regional price benchmarks, brought together regulators, government officials, refiners, traders, financiers, infrastructure investors and other energy market participants.
Umar said the region had made progress since the inaugural conference in 2025, but warned that institutional developments alone would not be sufficient to create a functioning regional market.
According to him, the 2025 conference established a roadmap towards developing a West African refined-products reference market, with emphasis on reliable refining capacity, stronger logistics and storage networks, interconnected ports, roads, rail and pipelines, harmonised standards and transparent market data.
He noted that progress had since been recorded in the institutionalisation of regional regulatory cooperation through the West Africa Regulators Forum, efforts towards West African reference pricing and deeper collaboration with S&P Global Commodity Insights.
However, Umar said these developments represented only the foundation of the proposed market.
“A reference price is not by itself a trading hub. A conference is not a market,” he said, stressing that regulatory cooperation could not replace the physical infrastructure, commercial liquidity, market information and operational excellence required for a credible trading hub.
He said Africa already possessed the key ingredients for a vibrant regional petroleum market, including abundant resources, growing demand and expanding refining capacity.
“What we must now build is the infrastructure that efficiently connects all three,” Umar said.
He identified refineries, pipelines, storage terminals, jetties, ports, rail networks, road corridors, marine logistics, strategic reserves and digital trading platforms as critical components of the infrastructure required to connect production with markets.
According to him, investment in infrastructure should not be pursued merely for its own sake, but should focus on reducing the cost of moving petroleum products, improving security of supply, increasing inventory visibility and expanding the number of credible market participants.
Umar urged countries in the region to adopt a more integrated approach, arguing that not every country needed to replicate the same infrastructure.
He said strategically located refining, storage, port and distribution facilities could serve multiple markets if supported by predictable cross-border arrangements.
The NMDPRA chief also described Africa’s infrastructure deficit as an investment opportunity, identifying pipelines, product transportation systems, storage facilities, marine terminals, refinery expansion, road and rail logistics, gas infrastructure, digital commodity exchanges, product-tracking systems and trading platforms as areas capable of attracting capital.
He, however, said investors would only commit funds where projects were bankable, risks were understood, regulations were predictable and returns could be sustained.
“Our responsibility as governments and regulators is therefore to create the conditions that allow capital to move confidently,” he said.
Umar also highlighted operational efficiency as a critical but often neglected component of petroleum market development.
He said inefficient ports, terminals, pipelines, storage systems and logistics networks could undermine the benefits of infrastructure investment by creating bottlenecks and increasing costs.
He called for improved turnaround times at ports and terminals, safer and more reliable pipeline and storage operations, and sustained refinery utilisation and efficiency.
He further advocated the deployment of technology for inventory management, product tracking, demand forecasting, scheduling and operational visibility.
According to him, the efficiency of the system delivering petroleum products ultimately influences price competitiveness.
“Operational excellence is therefore not separate from price competitiveness; it is one of its foundations,” Umar said.
On market transparency, he said a credible petroleum benchmark could not emerge from an opaque market, stressing that effective price discovery required sufficient transactions, willing participants, reliable reporting and confidence in market information.
He called for reliable data on supply, demand, inventories, infrastructure availability and legitimate commercial transactions to support investment decisions and effective regulation.
“Markets operate on information. Benchmarks operate on trust,” he said.
Umar also called for greater regulatory harmonisation across West Africa, noting that differences in product specifications, licensing procedures, tariffs, data definitions and cross-border processes could make regional trade more expensive.
He said the West Africa Regulators Forum must evolve beyond local regulatory oversight to become a practical mechanism for facilitating cross-border energy security and trade.
According to him, regulators should work towards sharing information, aligning standards where appropriate, improving cross-border trade processes and developing interoperable market rules.
Looking ahead, Umar identified five priorities for the region: deepening physical market liquidity, financing strategic infrastructure, accelerating regulatory and product-standard harmonisation, institutionalising market transparency and building a complete trading ecosystem.
He said a mature market would require refiners, traders, terminal operators, ship owners, marketers, banks, insurers, commodity exchanges, data providers and regulators to operate within an environment of commercial trust.
Umar said the transformation of the regional refining landscape, particularly the operationalisation of major facilities such as the Dangote Refinery, was already reshaping West Africa’s petroleum supply chains.
He maintained that the question was no longer whether the region had the potential to become a petroleum pricing and trading centre, but whether stakeholders were prepared to provide the infrastructure, capital, data and regulatory cooperation needed to realise that ambition.
“In 2025, we developed the roadmap. In 2026, we must finance and execute it,” he said.
He said the ultimate measure of success should be a West African market where petroleum products move more efficiently, supply is more secure, regional trade expands and prices increasingly reflect the fundamentals of the African market.
Umar stressed that achieving the objective would require infrastructure, capital, operational excellence and regulatory cooperation, but above all, execution.
He reaffirmed NMDPRA’s commitment to working with regional partners, investors, operators, financial institutions and other market participants to establish a transparent, liquid and resilient African petroleum market.
(The Whistler)