Nigeria leads push for integrated $-fuel market in West Africa

Nigeria is pushing for an integrated West African petroleum market that will allow locally refined products to be traded, priced and financed within the region, as the country’s expanding refining capacity creates a new opportunity to transform West Africa from a petroleum import-dependent market into a regional energy trading hub.

The push comes as Nigeria increasingly meets domestic petrol demand from local refineries, while refined products produced in the country begin reaching markets across Africa and beyond.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said the next challenge is to build the infrastructure, financing structures and regulatory framework required to convert increased refining capacity into deeper regional trade, stronger energy security and lower supply-chain costs.

Rabiu Umar, Chief Executive of the NMDPRA and Chairman of the West Africa Regulators’ Forum (WARF), said the region had reached a point where the question was no longer whether West Africa could become a credible petroleum pricing and trading centre, but whether stakeholders were prepared to build the market needed to achieve that ambition.

He spoke at the West Africa Refined Fuel Market Conference in Abuja, organised by the NMDPRA in collaboration with S&P Global Commodity Insights and WARF.

Umar said the operationalisation of major refineries, particularly the Dangote Refinery, was fundamentally reshaping regional petroleum supply chains and creating an opportunity for West Africa to determine the value of its own refined products.

“Our ambition should be that a product refined in West Africa should not have to leave West Africa before the market can credibly determine its value,” he said.

The statement captures the economic challenge confronting the region: increased refining capacity will have limited impact if petroleum products still have to pass through inefficient ports, fragmented markets and costly logistics systems before reaching consumers.

Nigeria’s economic reforms under President Bola Tinubu, he said, were aimed at creating a more competitive energy market, strengthening the investment environment and repositioning energy as an engine of economic growth.

Today, Nigeria refines the majority of the petrol consumed domestically, significantly reducing dependence on imports, while local refined products are increasingly finding markets outside the country.

The development has created a new investment opportunity across the petroleum value chain.

According to the NMDPRA, however, the region must now invest in pipelines, ports, storage facilities, coastal vessels, trucking networks and trading platforms to ensure that products can move safely and efficiently across borders.

The industry will also require greater access to trade and infrastructure finance, common product standards and stronger cooperation among regulators, customs authorities and market participants.

The objective is to turn Nigeria’s scale and refining capacity into a platform for regional energy security rather than allowing individual countries to continue operating in isolated markets.

“The President’s ambition is clear: Nigeria should serve as a dependable anchor for a deeper, more competitive and increasingly integrated West African energy market,” the statement said.

The economic implications are significant.

A functioning regional fuel market would create a larger market for Nigerian refineries, improve the utilisation of infrastructure, deepen petroleum trade, attract investment into storage and transportation and potentially reduce the cost of moving products between West African markets.

It could also strengthen Nigeria’s position in regional price discovery, allowing petroleum prices to increasingly reflect local supply, demand and logistics conditions rather than external benchmarks alone.

Financial institutions are expected to play a critical role by developing long-term financing structures for energy infrastructure, while industry operators would be required to provide reliable transaction data to support the development of credible regional price benchmarks.

Governments, meanwhile, would need to remove unnecessary barriers to cross-border trade and establish predictable policies, while regulators would have to balance consumer protection with investment, innovation and competition.

The NMDPRA’s new leadership has been commended for what stakeholders described as a greater emphasis on transparency, collaboration, commercial pragmatism and engagement with industry.

The emerging regulatory approach is particularly important as Nigeria seeks to attract long-term capital into infrastructure-intensive sectors.

Strong regulation, the government said, should not be measured by the number of restrictions imposed on investors, but by the clarity of rules, consistency of enforcement and confidence created among businesses and investors.

“Investor confidence is not built by lowering standards. It is built by establishing clear standards, enforcing them fairly and ensuring that credible investors can make long-term decisions with certainty,” the statement said.

The region has already begun laying some of the institutional foundations for an integrated petroleum market.

The West Africa Regulator Forum emerged from the previous year’s gathering, while S&P Global Commodity Insights has established an office in Abuja and Platts has introduced Naira-denominated assessments for refined products produced in West Africa.

These developments could provide the foundation for a more transparent regional petroleum pricing system and eventually deepen liquidity in the market.

But stakeholders said the next stage must move beyond individual transactions and isolated infrastructure projects towards connected regional corridors and sustained institutional cooperation.

The NMDPRA’s position also aligns with the wider effort to establish a credible African reference price benchmark that reflects regional market realities and improves transparency in petroleum pricing.

The regulator has separately proposed new competition rules designed to prevent petroleum companies from coordinating prices, restricting supplies or engaging in market-sharing arrangements that could distort competition in Nigeria’s midstream and downstream petroleum sector.

The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations 2026 are expected to strengthen competition and improve transparency as the domestic market becomes more commercially significant.

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyiwa Eyesan, said Nigeria’s upstream and downstream sectors were undergoing major changes, with the country moving towards a position where it could meet domestic refining requirements and increasingly export refined products.

She also called for an integrated West African market rather than continued operation of petroleum markets in silos.

The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, similarly urged investors to take advantage of the opportunities emerging from the region’s refining expansion.

He said the progress recorded by the Dangote Refinery demonstrated the potential of large-scale refining investment, but argued that additional capacity was still required to achieve wider regional energy security.

The Federal Government has previously linked the implementation of the Petroleum Industry Act 2021 with renewed investment in the oil and gas sector.

The House of Representatives disclosed in 2025 that the PIA had attracted more than $16 billion in investment commitments, while Nigeria earned N50.88 trillion from crude oil and gas exports in 2024.

For Nigeria, the next economic opportunity is therefore not simply to refine more petrol.

It is to build the infrastructure and market architecture capable of turning that refining capacity into sustained export earnings, regional trade, investment and industrial growth.

If successful, an integrated West African petroleum market could create a much larger commercial ecosystem around Nigerian refining, from pipelines and storage to shipping, trucking, finance, insurance, trading and technology.