Efforts to establish a regional benchmark for petroleum products in West Africa are gaining momentum, but regulators say significant hurdles must first be addressed, including harmonising fuel quality standards, removing cross-border trade barriers and improving market liquidity.

The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Rabiu Umar, stated this on Wednesday in Abuja, stressing the need for deeper integration of West Africa’s petroleum market.

Umar said ECOWAS countries must move towards a more integrated market by leveraging their respective competitive advantages instead of duplicating infrastructure across the region.

He identified the harmonisation of petroleum product specifications as a critical first step, warning that differences in fuel quality standards could undermine the credibility of any regional price benchmark.

The NMDPRA chief raised concerns over the continued consumption of high-sulphur petroleum products in parts of West Africa, with some specifications exceeding 200 parts per million.

He warned that the use of such products poses significant risks to public health and the environment.

Umar also identified market liquidity and infrastructure as key requirements for establishing a sustainable regional benchmark, noting that meaningful price discovery would be impossible without sufficient volumes of petroleum products being traded across the region.

He called for the removal of regulatory and customs barriers that restrict the movement of petroleum products between ECOWAS member states.

According to him, allowing products to move more freely across borders would strengthen competition, improve supply security and support the development of a more transparent regional market.

The push comes amid Nigeria’s growing refining capacity, particularly the expansion of the Dangote Refinery, which has increased expectations that Nigeria could emerge as a major supplier of refined petroleum products to West African markets.

Umar said Nigeria had already become a net exporter of petroleum products, describing the development as an indication that regional integration was beginning to take shape.

He, however, stressed that greater cooperation among ECOWAS countries would be required to transform the emerging trend into a fully integrated regional petroleum market.

The initiative is also attracting support from S&P Global Commodity Insights, which has been developing price assessments for African refined petroleum product markets.

Umar further emphasised the importance of access to finance, saying banks and other financial institutions would play a critical role in funding the infrastructure needed to support an integrated West African petroleum market.

He said stronger collaboration among regulators, governments, traders, financial institutions and other industry stakeholders would be essential to creating a credible and sustainable regional benchmark.