NMDPRA Sounds Alarm: West Africa Must Stop Letting Europe Set Fuel Prices

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called on Nigeria and other West African countries to break away from heavy reliance on foreign fuel price benchmarks and develop a system that reflects the realities of their own markets.

NMDPRA Chief Executive, Rabiu Umar, made the call at the second West Africa Refined Fuel Market Conference in Abuja, where industry stakeholders discussed ways to build a more transparent and regionally relevant fuel market.

Umar, who is also Chairman of the West Africa Regulator Forum (WARF), argued that it no longer makes sense for developments in Western Europe and the Mediterranean to have such a strong influence on petroleum prices across Africa.

‘Why should Europe determine our fuel prices?’

Umar said growing refining capacity across Africa should encourage countries in the region to establish their own pricing mechanism.

He noted that disruptions in Western Europe or the Mediterranean could have little or nothing to do with conditions in West Africa, yet still trigger higher fuel prices across the region.

According to him, fuel prices should increasingly reflect factors such as local supply and demand, refining capacity, geopolitical developments and conditions within the regional market.

He said developing a West African benchmark would help the region reduce its exposure to external shocks and create a pricing system better suited to local realities.

The conference was jointly organised by NMDPRA, S&P Global Commodity Insights and WARF under the theme, “Funding West Africa Infrastructure & Distribution to Create a Transparent Market for Regional Price Benchmarks.”

FG calls for more refineries

Speaking at the event, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, called for greater investment in Nigeria’s oil and gas industry, particularly in the midstream and downstream sectors.

Lokpobiri warned that the country’s current refining capacity remains inadequate to meet domestic demand.

He said the Dangote Refinery’s 650,000-barrel-per-day capacity, while significant, would not be sufficient on its own to meet Nigeria’s fuel requirements.

The minister therefore urged investors to support the expansion of refining capacity across the country.

The push for a regional fuel pricing benchmark comes as West African countries seek to strengthen local refining, improve fuel distribution and reduce their vulnerability to price shocks originating from markets outside Africa.