West Africa Refined Petroleum Products Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The West African refined petroleum products market is expected to grow with a CAGR of around 5% during the forecast period. The COVID-19 pandemic has significantly impacted the market in the region due to the downfall in the demand of fuels like gasoline which is highly used in transportation, which got blocked during the lockdown, and the plummeted power demand where fuels are used to generate power. The two major drivers of the West African refined petroleum products market are, the extremely high power demand in many semi-urban and rural communities in countries like Ghana and Nigeria which can be immediately met by the fuel-driven power sector, and demand for marine fuels due to steadily growing shipping industry. However, the recent virus outbreaks like Omicron, and other variants can hamper the demand for fuels like aviation fuel, due to less travelling by airways.

Key Highlights

• The Automotive fuels are expected to dominate the market during the forecast period, due to the fast-growing vehicles fleet in the region.
• In many parts of West Africa, a huge population uses highly pollutive fuels for cooking and lighting like biomass, firewood, charcoal etc. In Ghana, more than 60% of total energy consumption comes from biomass fuels ,as people are deprived of clean fuels like LPG. The Ghana government are indeed at providing LPG to these communities either in a subsidized form or free of cost cylinders. Such an action will prompt other countries in the region to maximize the use of clean fuels in such applications, which can accelerate the market.
• The private sector's keen interest in investing in the refining sector of countries like Nigeria can lead to a peak-level development of he market.

Key Market Trends

Automotive fuels Expected to Dominate the Market

• The automotive fuels are expected to grow at the fastest rate during the forecast period, due to the governments' new regulations to adopt upgraded and cleaner versions of petrol and diesel in the transportation sector.
• Nigeria's average price of PMS(petrol) was recorded around NGN 164.8 in September 2021. The number of units sold for motor vehicles from January to August 2021 was recorded as 7250. The datas show the steadily growing vehicles market in the country due to low petrol prices.
• In February 2020, the governments of many countries in the region attended the high level ministerial meeting organized by Economic Community of West African States Commission with the support of the United Nations Environment Programme (UNEP). The motive was to pass regulations to adopt cleaner and upgraded versions of automotive fuels (petrol and diesel) to curb pollution levels, which is at alarming rate in many parts of the region.
• In August 2020, Volksvagen started the operations of the newly established vehicle assembly facility in Ghana. The assembly of the first car marked the beginning of the company in the country. The manufacturing facility is the result of the government's concrete steps to stengthen the local automotive industry in Ghana. It will lead to supply additions in the vehicle industry of the country, and the growth of fuel demand too.
• Owing to such developments, the automotive fuels are expected to dominate the market in the coming years.

Investments by Private Sector Expected to Drive the Market

• The West Africa refined petroleum products market is expected to get accelerated by investments by independent energy companies, due to many governments' bold steps. For example, Nigerian government has planned to have a minority shareholding for themselves even in the already existent state-owned refineries. They hinted at attracting investments by private companies.
• Nigeria's refining sector has witnessed degradation in the recent scenario due to the productivity issues. The four public-sector refineries can process 445,000 barrels of crude oil daily, but they were running at around 7.6% average utilization rate in 2019. These issues demanded new investments to cure the ailing refining sector. There are about 23 valid licences pending for new refineries, as of 2021.
• In July 2021, Niger Delta Exploration & Production Plc (NDEP), an independent integrated energy company, announced that they are about to inaugurate a new 11,000 b/d refinery in Nigeria. The company also got approval for the addition of Train3 of the already existent Ogbele refinery.
• Owing to such an interest from the private companies, the market is expected to grow at a fast pace in the near future.

Competitive Landscape

The West African refined petroleum products market is moderately fragmanted. Some of the major players in this market include Puma Energy Holdings Pte Ltd, Monjasa Holding AS, Trafigura Group Pte Ltd, Vitol Holding BV, Oando Plc, and Mercuria Energy Trading SA.

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