Despite its status as a major hydrocarbon-producing region, West Africa still relies heavily on international benchmarks. From the U.S. Gulf Coast to Northwest Europe, pricing for petroleum products must be reviewed.

These global indices often fail to reflect the regional distinct market realities and supply chain challenges. This disconnect has reignited calls for an African reference pricing system, one that better aligns with local dynamics.

A significant step in this direction was taken recently during a two-day strategic engagement organized by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in partnership with S&P Global Commodity Insights.

The event focused on establishing a regional pricing reference point that would drive transparency and efficiency in West Africa’s petroleum market.

According to the NMDPRA, a localized benchmark would not only enhance petroleum product trading across the subregion but also provide real-time pricing that reflects actual supply, demand, and logistical realities. This would serve as a crucial tool in addressing the lingering inefficiencies tied to import dependency and global market volatility.

Nigeria, in particular, is rapidly evolving into a midstream and downstream trading hub.

The country’s extensive maritime coastline, deep-sea ports equipped with modern infrastructure, and a robust regulatory framework have positioned it as a pivotal player in the regional energy landscape.

These factors make Nigeria well-suited to anchor a regional pricing reference for petroleum products.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri underscored the importance of private sector investment in refining capacity. He stated that while the Dangote Refinery is a major milestone, it alone cannot meet the continent’s growing energy needs. “Other refineries must follow to not only serve Nigeria but the wider African market,” he emphasized.

Industry stakeholders acknowledged the high capital requirements and complexity involved in building refineries, but emphasized the long-term benefits of local refining, including job creation, improved energy security, and reduced foreign exchange pressure.

To support this vision, energy leaders urged African governments to adopt policies that protect domestic producers from unfair global competition—mirroring protective strategies employed by countries like the U.S., Canada, and members of the European Union.

The Nigerian National Petroleum Company (NNPC) also reaffirmed its commitment to the future of domestic refining. Through strategic equity in the Dangote Refinery, investment in condensate refineries, and support for third-party projects, NNPC is laying the foundation for a self-sufficient refining ecosystem across Nigeria and the region.

Currently, West Africa meets only 31% of its petrol demand through regional refining, with the majority still imported.

This heavy reliance highlights the urgent need for a regional pricing mechanism that underpins energy security and fosters economic independence.

Ultimately, the goal is to establish a transparent, Africa-led oil and gas pricing system, built on regional collaboration, regulatory alignment, and shared economic aspirations.

This vision signals a transformative shift—not only in how petroleum is priced in Africa, but in how the continent asserts control over its own energy future.