The Belgian law that restricts the export of low-quality fuels, and financial constraints on the part of Nigerian importers are making it difficult for buyers in Northwest Europe to sell gasoline to West Africa. They will have to look at other options until Nigeria’s Dangote Refinery can meet demand.

The Belgian legislation that came into force on September 14 tightens the allowed sulphur level of road fuels exports. It is now 50 parts per millions, three times more strict than the Nigerian limit. This law brings Belgium in line with the Netherlands which passed a similar legislation last year.

Gasoline exports from the Amsterdam-Rotterdam-Antwerp (ARA) hub region to West Africa fell to about 150,000 barrels per day (bpd) in September, Kpler data shows, the lowest since May 2020 in the early days of the Covid pandemic.

The data show that exports to West Africa from Belgium were at a low since December 2020, at 90,000 bpd. Exports in the EU and UK reached a new one-year record of 255,000 bpd.

The Nigerian refinery's production of 650,000 bpd is expected to increase, so any shortfall caused by the loss in ARA blending will likely be temporary. It is not yet clear when the plant can meet all domestic demand.

Pamela Munger is the lead analyst at Vortexa. She said that it could take several months before gasoline production in Nigeria reaches an adequate level to meet domestic demand.

Analyst Winston Swomley stated that West African consumers were not expected pay more for better-quality gasoline as the credit lines required to facilitate foreign currency payments are difficult to secure.

As a result, West Africa-grade blending will likely shift from ARA and other locations.

Ronan Hodgson, energy consultant FGE, said that financial constraints prevented any rush to buy higher-sulfur grade fuel from Belgium in the last minute before legislation was introduced.

Malta, which does not have oil refineries, loaded 20,000 bpd in gasoline to West Africa between July and August. This compares with 4,000 bpd for the first half year.

Kpler data show that exports from Spain to West Africa have averaged 35,000 bpd, almost four times the level of last year. (Additional reporting by Ahmad Ghaddar, London Editing by Kirsten Doovan)

(source: Reuters)