LPG is the fastest-growing oil product in Africa and in CITAC’s view its future growth path is relatively clear of downside risks.
Living with the risk of daily oil price volatility on both crude oil and products is part of the life of any refinery. While margin risk can—and has—forced many refiners out of business, the process is generally a slow one.
LPG consumption in SSA has experienced tremendous growth over the past 10 years, averaging a compound annual growth rate of 9.6%. Consumption has more than doubled since 2010, reaching 4.0mn mt in 2019.
Crude trading in West Africa has been battered over the past five years by shifts in trade patterns, low oil prices and now by rapidly changing relative values for crudes as new IMO rules for bunker fuels loom.
The end of the mass-sale of the majors’ assets left space for smaller players and adjustments only. But fast-growing markets, driven by demand for transport fuels, vehicle fleet growth and population and urbanisation trends, opened opportunities for organic and small-scale inorganic (i.e. via acquisitions) growth of existing players and new entrants.
Across the globe, environmental issues are increasingly becoming the focus of civil society, companies and governments. In Africa, most of the discussions and progress have concentrated on changing specifications, particularly sulphur limits in gasoline and gasoil.
The international crude oil market has suddenly become volatile than at any time in the past five years.
CITAC studies the impact on refiners, shipping and the bunker supply chain of the introduction of global low sulphur bunkers for shipping.