The biggest consumers of base oils in Africa are Egypt, Nigeria
and South Africa, which between them make up almost 60pc of the
continent’s demand
ownership, road haulage and industrial activity,
and thus a need for a steady supply of affordable
oil products.
Gradual liberalisation of markets is fostering
more trade though much progress remains to
be made in that area. From a base oils trader’s
perspective, the African market is beautifully
opaque. Opacity in two regards: price and
product flow information. When distributors
and blenders further along the supply chain do
not have access to the same market data, it is
possible for their suppliers to achieve higher
prices than might be achievable in an efficient,
open market with equal access to information.
the supply chain.
The biggest consumers of base oils in Africa
are Egypt, Nigeria and South Africa, which
between them make up almost 60pc of the
continent’s demand. Among regional trends
are the continuing dependence of west African
importers on Russian supply of heavy grade
base oils as lighter grades continue to struggle
to find a foothold in that market. South Africa
is seeing a gradual switch to Group II base oil
consumption as regional production of Group I
product dwindles. And east African importers,
already heavily reliant on production from
the Mideast Gulf, are hoping for an inflow
of Iranian product if sanctions are lifted as
planned in December.
Price trends
It is also possible for traders to offload surplus
products into the African market without
causing ripples in the more closely watched
wholesale markets such asRotterdam or
Singapore.
Argus publishes a weekly base oils report,
with price assessments for base oils in key
regions including those which supply Africa
(Europe, the former Soviet Union and the
Mideast Gulf). But we do not yet publish landed
prices for base oils delivered to African ports
due to the lack of transparency at that point in
Septmber 2015 • | Lubezine Magazine
In broad terms, base oils prices have followed
a similar rollercoaster to those of crude oil
and gasoil, over the past year or so, though a
closer look at the relative prices shows a market
increasingly responsive to underlying trends
and also quicker to establish new relationships
when the fundamentals change.
Until recently base oils, and by extension
lubricants, market ́