ARDA Seeks Market-equivalent Prices, Others For Attractive Downstream Petroleum Sector

African Refiners and Distribution Association (ARDA) has said that there was a need for market-equivalent pricing and taxation framework if the downstream segment of the continent’s petroleum industry will attract needed investment.

Despite growing demand for petroleum products, Africa has remained a primary export of crude oil while its economy suffers from import of the white products.

Executive Secretary of ARDA, Anibor Kragha, while delivering a presentation at the Oil Trading & Logistics 2023 Expo in Lagos, Nigeria, said there was a need for the continent to also create a clear policy to grow security in the aspect of Liquified Petroleum Gas (LPG).

Kragha, in his presentation on “Africa Refining: Regional Sufficiency and Global Energy Transition,” said there was a need for coordination across the continent.

According to him, tightening and harmonisation of cleaner oil product specifications remained sacrosanct in the face of looming health and environmental dangers.

He also called for tansparency and forward visibility around medium to long-term regulatory frameworks as well as coordination across key sectoral Ministries to support investors’ business plans.

Kragha stated that sub-Saharan Africa oil products demand would hit 177 million metric tons by 2040.

Insisting that the rising demand in Africa requires significant investment in storage and distribution infrastructure, Kragha said efficient regional infrastructure would lead to economies of scale.

Kragha also called the continent to publicly publish available documentation covering various licensing processes.

Kragha called for a long-term carbon mitigation strategies, saying it has serious implications for the future of refining and finance.

Currently, ARDA is working on the adoption of a harmonized pan–African clean petrol specification, particularly Afri 6 or 10 per of gas per million parts of air(ppm) specification for fuel across Africa.

“In Africa we have 11 different grades of diesel or gas oil engine from 10 ppm to 10,000 ppm and for gasoline (petrol), we have 12 different grades ranging from 10ppm to 2,500 ppm. So that initiative is to have a single 10ppm grade by 2030 across Africa,” he stated.

He said ARDA was spearheading investments across the extensive downstream value chain, adding that the focus was firmly on bolstering Africa’s energy security by optimising the utilization of African crude oil within African refineries and facilitating the transportation of cleaner fuels through an integrated storage and distribution infrastructure across the continent.