Push to establish a regional benchmark for petroleum products in West Africa is gathering momentum, but regulators face pressure to first harmonise fuel quality standards, remove cross-border trade barriers and deepen market liquidity, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said.

The Chief Executive Officer of NMDPRA, Rabiu Umar, speaking yesterday in Abuja, said the region must move towards greater integration by allowing countries to build around their competitive strengths rather than duplicating infrastructure across markets.

Umar said the first requirement was to unify product-quality specifications, warning that differences in fuel quality would undermine efforts to establish a credible regional price benchmark.

Across the Economic Community of West African States (ECOWAS), high sulphur petroleum products are being consumed with some specifications rising above 200 ppm, a development that is detrimental to health and the environment.

He identified liquidity and infrastructure as other critical pillars, arguing that a benchmark could not function without sufficient volumes of petroleum products being traded.

According to him, regulatory and customs barriers restricting the movement of products across borders must also be removed to allow petroleum products to flow freely within the region.

The comments came as Nigeria’s expanding refining capacity, particularly the Dangote refinery, raises expectations that the country could become a major supplier to West African markets and help underpin a regional trading hub.

Umar said Nigeria had already become a net exporter of petroleum products, describing this as evidence that regional integration had begun, although much more needed to be done to deepen it.

The regional push is also receiving support from S&P Global Commodity Insights, which has been developing price assessments for African refined-product markets.

Umar also stressed the importance of financing, saying banks would be indispensable to the development of the infrastructure required to support an integrated regional petroleum market.