Nigeria partners with S&P Global for West African petroleum price index

Nigeria has partnered with S&P Global Commodity Insights to develop a regional pricing benchmark for refined petroleum products in West Africa, the country’s downstream regulator said on Tuesday. The initiative, launched at the West African Refined Fuel Conference in Nigeria’s capital Abuja, aims to create localised indices for products such as petrol, diesel, aviation fuel and liquefied petroleum gas. West Africa is a significant oil and gas producer as well as a growing refining hub. But it is currently dependent upon posted prices from global reference markets, said Farouk Ahmed, head of Nigeria’s Midstream and Downstream Petroleum Regulatory Authority.
“While these benchmarks are globally accepted, often they do not reflect the unique supply chain peculiarities, market dynamics and economic realities of the African continent,” Ahmed said. The partnership will improve price transparency, support investment decisions and enhance energy security across the region, he added. OPEC member Nigeria, Africa’s largest crude producer, is implementing reforms to liberalise its downstream sector as it positions itself as a regional trading hub. The Dangote petroleum refinery in the commercial capital Lagos, for example, with refining capacity of 650,000 barrels per day, started operations last year and has been ramping up production and seeking new markets. Nigeria currently produces some 31% of the refined fuel traded in West Africa, with that share expected to grow as new refining projects come online.