FG, Other West African Countries Move to Fix Fuel Prices for Dangote, Other Refineries
- Nigeria's MDPRA chief said the Dangote Refinery's launch in 2024 changed how fuel supply chains work across West Africa
- West African regulators began working with S&P Global Commodity Insights to build a regional refined-products benchmark market
- Regulators flagged infrastructure gaps, poor logistics, and fragmented rules as major barriers blocking progress on the regional hub
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
West African energy regulators are working to create a regional fuel pricing benchmark and trading hub, driven largely by the presence of the 650,000-barrels-per-day Dangote Refinery in Nigeria.
Rabiu Umar, chief executive of Nigeria's Midstream and Downstream Petroleum Regulatory Authority (MDPRA), said the refinery's commercial start-up in 2024 had already shifted how petroleum products move across the region, creating a new case for West Africa to develop its own price discovery system separate from foreign benchmarks.
Source: UGC
Umar made the remarks at a regional refined fuel market conference, where he argued that the continent could no longer afford to remain on the sidelines of global petroleum pricing.
"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 Africa's Push for a fuel benchmark
Regulators across the region have taken steps towards building this market, including forming closer ties with S&P Global Commodity Insights, which plays a central role in global commodity price reporting.
Umar said alignment on fuel pricing and regulation had improved over the past year, but significant challenges remain.
Poor infrastructure, weak logistics networks, and limited market transparency were identified as the main obstacles standing between the current situation and a fully functioning regional trading hub.
To make the proposed market work, regulators said the region would need sustained investment in pipelines, storage facilities, marine logistics, and digital trading systems, all of which are needed to improve product movement and boost market liquidity.
Regulatory fragmentation slowing progress
Beyond physical infrastructure, regulators pointed to differences in fuel standards, licensing frameworks, and trade rules across West African countries as a growing problem.
The lack of harmonisation, they said, raises the cost and complexity of cross-border energy trade, limiting how much each country can gain from the region's expanding refining capacity, according to a report by BusinessDay.
Source: UGC
The Dangote Refinery, alongside other refining projects under development in the region, is expected to significantly increase the local supply of petroleum products. Regulators said this growing supply base is what makes a regional benchmark market both possible and necessary.
If successfully established, the benchmark could give West African buyers and sellers a transparent local reference price for refined products, reducing the region's dependence on international pricing mechanisms that have historically left African markets with little room to influence their own energy costs.
Dangote raises alarm over high crude prices
Legit.ng earlier reported that Dangote Petroleum Refinery has cautioned that crude oil sold by local producers at prices above international market rates threatens the financial logic of domestic refining and could eventually drive up pump prices for Nigerian consumers.
Devakumar Edwin, Group Vice President for Oil, Gas and Fertiliser at Dangote Industries Limited, made the clarification in response to data published by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which showed the refinery rejected 15.5 million barrels of crude offered by domestic producers in the second quarter of 2026.
Source: Legit.ng
