Key Takeaways:
- NMDPRA wants Nigeria and West Africa to develop a fuel pricing benchmark based on local market conditions.
- Rabiu Umar says Nigeria should not continue using Europe-linked reference prices while domestic refining capacity is expanding.
- The push comes as S&P Global Energy expands its presence in Nigeria with a new Abuja office.
Nigeria’s petroleum regulator is seeking a new fuel pricing model that would reduce the country’s reliance on reference prices linked to European markets as domestic refining capacity expands.
Rabiu Umar, chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), made the case during the opening of S&P Global Energy’s new Abuja office on Thursday, as the global energy intelligence firm deepened its engagement with Nigeria’s oil and gas sector.
“Right now, we’re buying product in Nigeria and we are having a reference price that is related to Europe. We are saying that is not right, especially now that we have the liquid in Nigeria,” Umar said.
His comments reflect a broader push by the NMDPRA for a regional benchmark that better captures the economics of refined petroleum products produced and traded in West Africa.
Umar has previously argued that disruptions in Western Europe or the Mediterranean should not automatically determine fuel prices in African markets.
Nigeria seeks local reference price
The argument has gained importance as Nigeria’s refining landscape changes, particularly with the expansion of the Dangote refinery and the return of greater domestic refining capacity.
Umar said in July that Africa needs its own reference pricing system because much of the continent’s oil and gas trade is still priced against benchmarks established outside the region.
He pointed to the existence of established trading and pricing hubs in Europe, North America and the Middle East as evidence of the gap in Africa.
The NMDPRA has said a regional benchmark could improve price transparency and make refined-product pricing more reflective of West African market conditions.
S&P Global has also backed the development of more locally representative price assessments. Joel Hanley, executive director for strategy and benchmarks at S&P Global Energy, said Nigeria and the wider West African region could emerge as an important pricing hub as refining and trading activity grows.
S&P Global expands Abuja presence
The pricing debate comes as S&P Global Energy establishes a stronger physical presence in Nigeria.
The company opened its Abuja office at the World Trade Center, bringing together government officials, regulators and oil and gas industry executives. S&P Global said the office is intended to strengthen its engagement with Nigeria and support stakeholders across the country’s energy and natural resources sectors.
“Nigeria is an energy powerhouse. We have serval days now of event because we believe in the importance of Nigeria, and Africa in the overall energy story which is changing rapidly,” Beth Evans, Head of Upstream Regional Insight, S&P Global Energy, told reporters.
S&P Global has already been developing price assessments for West African refined products.
In August, Platts, its commodities pricing business, introduced naira-denominated assessments for products including petrol, diesel, gasoil and jet fuel, alongside its existing dollar-denominated assessments.
For Nigeria, the push for a local benchmark comes as the country moves from heavy dependence on imported refined products towards a market with significantly greater domestic refining capacity.
The regulator’s position is that pricing mechanisms should evolve with that market. Rather than relying primarily on European assessments, Nigeria and its West African neighbours are seeking a system that reflects where products are now being refined, traded and consumed.
