Gasoil and diesel imports to west Africa are on track to slide to a 16-month low in February as rising prices weigh on demand.
Vortexa data show 728,000t of gasoil and 10ppm diesel arrived in west Africa by sea on 1-21 February, equivalent to 34,700 t/d. This is 15,100 t/d lower than the daily average across the whole of January, according to Argus media.
Currency depreciation is also affecting purchasing power in Nigeria, although gasoil imports to Nigeria have bucked the regional trend and are running 1,900 t/d higher so far this month than the January daily average.
Cameroon has not imported any at all so far this month after receiving 2,000 t/d in January. Imports to Ghana, Angola and Senegal are all down on a daily average basis.
Market participants say buying interest in Ghana has been constrained by a weaker local currency, which has reduced access to US dollars.
Market participants say traded volumes in the region have been below average this month. Higher prices are a key factor. The price of 10,000-20,000t high-sulphur gasoil cargoes delivered by ship-to-ship transfer at the regional offshore Lome trading hub in Togo were indicated at around $45/t above the front-month Ice gasoil futures contract on 22 February. For comparison, 30,000t cargoes of ultra low-sulphur diesel cif ARA were assessed at a much lower premium of $27.25/t to Ice gasoil on 21 February.
Ice gasoil itself has rallied in recent weeks, hitting a more than three-month high of $918.25/t on 9 February as concerns over supply disruption in the Atlantic basin persist in the wake of attacks on commercial shipping by Yemen’s Houthi rebels in and around the Red Sea, a key route for getting diesel and gasoil from east of Suez to northwest Europe.
The drop in seaborne imports to west Africa is squeezing supply to inland countries in the landlocked Sahel region, which increasingly rely on volumes shipped to Togo. Gasoil and diesel imports to Togo have been on a downward trend since September last year and this is likely to continue this month, with only 27,500t arriving on 1-20 February, according to Vortexa.
As a result, Togo and landlocked Burkina Faso, which relies entirely on overland deliveries, are currently experiencing a shortage of gasoil, market sources said.
Another aggravating factor is landlocked Niger’s inability to transport gasoil from its Soraz refinery by land to neighbouring Burkina Faso and Mali because of Islamist security threats along those countries’ borders, one market participant said. The refinery has had to readjust run rates as it has built up ample gasoil stocks, the source added.
Traders in Niger are exploring opportunities to export gasoil to neighbouring Chad instead. Chad is experiencing a shortage of gasoil after product from the country’s 20,000 b/d Ndjamena refinery was sold to the Central African Republic at higher prices than domestic values, with traders taking advantage of the lack of Sudanese exports since the country’s sole 100,000 b/d Khartoum refinery was bombed in November.
The gasoil undersupply in the Sahel comes as Niger’s president Abdourahamane Tiani, who took power in a coup in July last year, met with representatives from Togo, Burkina Faso, Mali and Chad on 17 February to discuss regional energy projects, with a view to reaching greater energy autonomy for the landlocked region.
Tiani said in December last year that he wants an increase in domestic refining capacity, after a project to increase jet fuel yields at the Soraz refinery was delayed by July’s coup.
