‘East Africa is an important export market for refiners in both the Middle East and India’, according to a recent report published by veteran shipbrokers, E.A. Gibson.
Citing the favourable coverage given to the Western and Northern continental markets that often leads to the Eastern markets being overlooked, the report goes on to say that, ‘the East African nations of Kenya, Mozambique and Tanzania provide major outlets for refiners in the East.’
With the East African region being highly dependent on product imports, thanks to its increasing population, vehicle usage and regional GDP growth forecast (6 - 7% in 2016), in combination with a low domestic refining capability, the refined product demand is speculated to remain robust.
Gibson’s report also highlighted the need to look beyond the major regional ports.
‘When assessing the demand prospects for product imports into East Africa it is important to look beyond the coastal states as a source of demand, with the key ports of Mombasa, Beira and Maputo serving as entry points for the landlocked interior nations of Zambia, Zimbabwe, Rwanda, Burundi, Uganda, South Sudan and eastern parts of the Democratic Republic of Congo. Regional trade statistics are notoriously difficult to obtain and validate. Yet analysis of Gibson clean spot fixture volumes into the region provides evidence of rapidly increasing demand, with 14 million tonnes of clean products fixed to Kenya so far this year, versus 12 million tonnes for the whole of 2014.’
With current exports from India and the Middle East dominating the market, Gibson’s report highlights the importance of downstream storage assets, required in order to supply the interior nations as listed above. While diesel remains the main transportation fuel for now, improved pipelines and a lower reliance on truck haulage is driving the demand for gasoline.