Nigeria to receive large chunk of gasoline import to West Africa

 

By Abimbola Tooki

Nigeria will receive a large chunk of record 730,000 barrels per day (bpd) of gasoline destined for West Africa from Europe this month.

Preliminary figures from data analytics firm Kpler showed that importers from this region will take advantage of relatively low European prices.

February's imports, if they fully materialise, would be over 70 per cent higher than January's, and the most since Kpler began tracking exports on the route in early 2017. The shipments are mostly destined for Nigeria, Africa's most populous nation.

Europe produces more gasoline than it consumes. As a result, the region is a major supplier to West Africa. It also exports to the United States, the world's leading gasoline consumer, but high U.S. inventories and lower U.S. demand in January helped to depress the price of European fuel.

The spread between Eurobob gasoline barges and Brent crude futures fell to a two-month low of around $6.70 a barrel in early January.

"Until the beginning of February, European gasoline was pricing particularly cheaply versus counterparts in the U.S. and Asia," Sparta Commodities analyst Philip Jones-Lux said.

"But with the European gasoline market picking up strongly so far in February, we'd expect to see this flow slow once again in March."

Cheap naphtha was also a factor after Red Sea shipping disruptions meant naphtha produced in Europe that would normally go to Asia Pacific stayed in the region.

Naphtha can be blended directly into gasoline or upgraded to make blendstocks used to create the right octane specification.

The Kpler figures also show imports to West Africa from the Netherlands, home to Europe's largest refinery, in February reached nearly 140,000 bpd, their highest since April 2023.

Last year Dutch exports shrank after Dutch authorities tightened regulations on the quality of fuel exports.

Belgium, which accounted for the biggest share of shipments in February, is expected to adopt similar restrictions this year, which traders and analyst say they expect to lower its exports to West Africa.

The start-up of the long-delayed Dangote oil refinery in Nigeria is also expected to reduce Africa's appetite to import European products. For now, it is still in testing phase.