By Bronson Jayamanna
NIGERIA (CWBN)_ Since the more recent years, China has been a top exporter of fuel to Africa. Nigeria, the biggest oil producer and exporter in the continent, has also resumed importation of oil from the Asian country, as the nation’s refineries have been idle for more than a year as they wait for essential maintenance, which has been delayed owing to cashflow constraints and coronavirus-related movement restrictions. According to S&P Global Platts, China delivered 37,000 metric tonnes of petrol to Nigeria in September for the first time since July 2019.
According to past GAC records, Togo was the first African country to receive Chinese petrol at 50,000 Mt in April 2018, followed by Nigeria at 51,000 Mt in January 2019. Most recently, the Asian nation had exported 40,000Mt and 35,000Mt of diesel to Kenya and South Africa, respectively.
As stated by the United States Energy Information Administration (EIA), China’s annual imports of crude oil rose by 0.9 million barrels per day (BPD) in 2019 to an average of 10.1 million BPD. The EIA continued to denote this increase in crude oil imports can be attributed to factors such as China’s new refining capacities and strategic stockpiling of inventory along with the flat domestic production of oil.
In 2019, China’s refinery capacity grew by 1.0 million BPD, mainly because two new refining and petrochemical plants with capacities of 0.4 million BPD each were brought online. As a consequence, according to the EIA, refinery processing in the country also grew to an all-time high during 2019, averaging 13.0 million BPD for the year.
For many years, as the nation’s refineries continue to remain in poor condition, Nigeria has continued to depend on imports to meet its fuel needs heavily. Furthermore, Africa’s uneven demand recovery has led to a disparity in support of Asian transport fuel markets. As the demand for diesel and jet fuel weakens, petrol demand remains robust, industry sources have reported. The source’s continued to say, the decline in African diesel and jet fuel demand had eliminated a significant support factor from the Asian, middle distillate markets after boosting them for most of the third quarter.
According to market sources as Africa receives many of its imports of petrol and middle distillates from the Persian Gulf and the Mediterranean, an increase in demand can usually end up contributing indirectly in favour of Asia.
Edited by Elishya Perera
