Stakeholders are concerned about energy security in Africa as petroleum products’ infrastructure, particularly for storage and delivery, threatens the continent’s expanding demand and surging population. This concern has been exacerbated by the ongoing Russia/Ukraine war.
The International Energy Agency (IEA) defines energy security as “Uninterrupted availability of energy sources at an affordable price,” but stakeholders at the African Refiners and Distributors Association (ARDA) were concerned that the lack of adequate storage and distribution infrastructure in the majority of African nations leaves them vulnerable to energy insecurity shocks.
Anibor Kragha, executive secretary of ARDA, lamented port-related difficulties while expressing significant concerns about the continent’s infrastructure for the storage of petroleum products. He was speaking during an ARDA workshop on Storage and Distribution.
As part of initiatives aimed at achieving the UN Sustainable Development Goals (SDGs) and reducing deforestation, Kragha had identified the necessity of investing in modern infrastructure as a window of opportunity for the endeavour to transition to greener energy sources.
In order to meet the anticipated rise in the demand for petroleum products throughout Africa, he mentioned the necessity for coordinated Storage and Distribution strategies, as well as investments across the continent.
The Executive Director of CITAC Africa, James McCullagh, discussed the “Role of Storage & Distribution in providing Energy Security in Coastal and Inland Countries” and stated that Africa would require dependability, reasonable pricing, and excellent Health, Safety, and Environment (HSE) procedures.
The Executive Director of CITAC Africa, James McCullagh, discussed the “Role of Storage & Distribution in providing Energy Security in Coastal and Inland Countries” and stated that Africa would require dependability, reasonable pricing, and excellent Health, Safety, and Environment (HSE) procedures.
He claimed that the Ukraine conflict came at a time when several refineries were closing due to inadequate stock capacity, adding to Africa’s anxieties.
He noted that this would necessitate a line item in national price structures and that minimum stock holding restrictions would act as a buffer against supply disruptions.
He emphasized the necessity for a consistent, five- to ten-year-out scenario to direct investment planning and regulatory framework.
McCullagh advocated for decentralized supply chains, transportation mode diversity, and energy
James Gooder, VP Crude at Argus, discussed how the Russia/Ukraine conflict magnifies global energy trends. He said that the Ukraine war affected development in Africa, with diesel prices taking the worst hit.
Gooder remarked that despite the fact that the world’s oil consumption is still recovering, crude production has found it difficult to keep up.
He stated that the Urals prices of CIF NorthWest Europe (NWE) no longer reflect the value of comparable crudes, noting that the development had recently pushed crude prices in the Atlantic Basin to record highs when compared with dated Brent, which was itself elevated against ICE Brent, West Texas Intermediate, and Dubai.
Changing flows meant that higher freight rates are increasing product price increases in Africa, according to Gooder, who observed that supply chain concerns made the continent face more obstacles.
Although there are many uncertainties in storage and delivery, experts from Vitol Maryro Mendez and Michael Curran stressed that the danger is rising in a combined presentation.
They said that oil on water had surged as a result of Russian exports being rerouted and that the market had already began a tightening cycle prior to the invasion of Ukraine.
They claim that compared to 2019, approximately 3 million barrels per day’s worth of refining capacity will be lost by the end of 2023, which might have significant effects on the entire supply chain.
