One of Europe's main markets for gasoline has shrunk, threatening to squeeze European refiners, after Nigeria removed fuel subsidies, which destroyed much of the country's domestic demand and a regional market for smuggled fuel.
Symptomatic of the fall in demand, onshore gasoline stocks in Nigeria have climbed to 960,000 tonnes from an average 613,000 tonnes between January and June, said Jeremy Parker at the CITAC consultancy which focuses on Africa's downstream energy market.for smuggled subsidised Nigerian fuel in Togo and neighbouring Benin and Cameroon has collapsed, further reducing demand for shipments via Nigeria.
"The key point is demand from West Africa is drying up," said Refinitiv Lead Oil Analyst Raj Rajendran. By contrast ARA exports to the United States rose to reach 695,000 tonnes so far this year in July, compared with 449,000 tonnes last year, although they were down from 791,000 tonnes in 2021.Gasoline stockpiles in the ARA hub are higher seasonally than they have been at least since 2003, according to Insights Global data, as U.S. exports from the region did not fully compensate for the lower WAF exports.
The huge, much-delayed Dangote refinery was designed to address the domestic supply shortfall, but full 650,000 barrel per day production isAnalysts said it was possible demand would not fully recover. Sparta estimates that fuel from the Mideast Gulf is around $35-$50 per tonne cheaper than ARA imports, around triple last week's spread, which could mean increased volumes into West Africa of Middle Eastern fuel.
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