Market Equivalent Prices, Taxation Framework for Attractive Downstream Petroleum Sector in Africa Imperative, Says  Kragha

Fadekemi Ajakaiye 

It is imperative to have market-equivalent pricing and taxation framework for the downstream segment of Africa’s petroleum industry to attract required investment. 

The African Refiners and Distribution Association (ARDA) said this in a statement it issued recently. 

According to ARDA, “Despite growing demand population and demand for petroleum products, Africa has remained a primary export of crude oil while its economy suffers from import of the white products.”

There is a need for the continent to also create a clear policy to grow security in the aspect of Liquified Petroleum Gas (LPG), stated the Executive Secretary of ARDA, Anibor Kragha in his presentation

“Africa Refining: Regional Sufficiency and Global Energy Transition,” at the Oil Trading & Logistics

2023 Expo in Lagos.

He said there is a need for coordination across Africa, adding that “Tightening and harmonisation of cleaner oil product specifications remains sacrosanct in the face of looming health and environmental dangers.”

ARDA ,he said, “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.”

According to him, “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.

“ARDA is spearheading investments across the extensive downstream value chain. The focus is firmly on bolstering Africa’s energy security by optimizing 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.”

He 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.”

Sub-Saharan Africa oil products demand, he said, would  hit 177 million metric tons by 2040, stating that “the rising demand in Africa requires significant investment in storage and distribution infrastructure, efficient regional infrastructure will lead go  economies of scale

He called on African nations “to publicly publish available documentation covering various licensing processes, and a long term carbon mitigation strategies,” adding that “it has serious implications for the future of refining and finance.”