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  • Business - Economy
  • Updated: April 30, 2024

Sahara Group identifies inadequate refining capacity, others as bane of downstream oil sector in Africa

Sahara Group identifies inadequate refining capacity, others

The Sahara Group has identified inadequate refining capacity, insufficient storage, and impeded product movement across Africa as the three major impediments slowing the growth of the continent’s downstream oil sector.

The Executive Director, Sahara Group, Wale Ajibade, in his paper – Africa Downstream Market Developments and Forecast – presented at the just-concluded Africa Refiners and Distributors Association (ARDA) Week 2024 in Cape Town, South Africa, Executive Director, stated: “Many African countries lack sufficient refining capacity to meet domestic demand, leading to heavy reliance on imports. This lack of self-sufficiency leaves these markets vulnerable to supply disruptions. Addressing this would require fresh investments and collaboration across the sector’s value chain."

On insufficient storage infrastructure, Ajibade noted that this has continued to hamper the ability to maintain strategic reserves and ensure reliable supply during times of high demand or supply chain disruptions.

He further stated that a collaborative solution that involves regulators, operators, investors, financial institutions, and government-owned oil companies is required to help the African downstream sector reach its full potential and provide reliable and affordable energy access to the continent’s growing population.

“Africa’s downstream Market leaders will need to work closely with the various governments and agencies to carefully navigate the complex challenges through regulation and technology adoption while pushing for sustainable growth across Africa,” he said.

He added that the continent increasingly relies on imports of refined products to support consumption growth, primarily due to the underutilisation of existing refineries caused by technical issues.

 

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