Nigeria partners with S&P Global for West African petroleum price index
Nigeria’s downstream regulator announced on Tuesday that it had teamed up with S&P Global Commodity Insights to create a regional pricing benchmark for refined petroleum products in West Africa.
The project, which was introduced during the West African Refined Fuel Conference in Abuja, Nigeria, intends to develop regional indices for goods like liquefied petroleum gas, diesel, gasoline, and aviation fuel.
West Africa is a major producer of gas and oil and a developing center for refining. However, Farouk Ahmed, the head of Nigeria’s Midstream and Downstream Petroleum Regulatory Authority, stated that it is now reliant on posted pricing from international reference markets.
“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 stated.
According to him, the alliance will increase energy security throughout the area, promote investment decisions, and improve price transparency.
Nigeria, the biggest producer of petroleum in Africa and a member of OPEC, is liberalizing its downstream industry as it seeks to establish itself as a hub for regional trade.
For instance, the Dangote petroleum refinery in Lagos, the commercial center, began operations last year and has been increasing production and looking for new markets. It has a 650,000 barrels per day refining capacity.
About 31% of the refined fuel traded in West Africa is now produced in Nigeria, and as more refining operations are put online, that percentage is predicted to increase.
