Global energy and commodity price reporting agency Argus has launched its first daily price assessments for low-sulphur diesel in west Africa, bringing much needed transparency to a region where domestic production and trade are rising rapidly.
The start-up of the 650,000 b/d Dangote refinery in Nigeria is driving a wave of liquidity and price liberalisation in a region that has lacked definitive local prices and has historically relied heavily on imported supplies of transport fuels. Dangote has stated that when the refinery is at full capacity, it will be able to supply the whole of Nigeria's domestic market and expects to have additional output available for export.
Argus' newly launched 50ppm sulphur diesel assessments will capture the value of 5,000-20,000t cargoes in the region, providing pricing in $/t outright terms, as a $/t premium to international diesel benchmark ICE gasoil and in Nigerian naira/litre. The assessments' focus on the ship-to-ship transfer market offshore Lome means they capture the value both of 50ppm diesel arriving from outside the region and the Dangote diesel. Typically large cargo imports are broken down and transferred onto smaller vessels for delivery to local ports in Nigeria and neighbouring west African countries.
Argus Media chairman and chief executive Adrian Binks said: "Argus' new prices will bring important transparency to a rapidly transforming marketplace. The start-up of the Dangote refinery has radically changed the Nigerian transport fuels industry, and our pricing will help market participants understand its impact."
The new prices mark Argus' first fully fledged market assessments for refined oil products in west Africa, and complement Argus's current "freight forward" prices in naira/litre for gasoline, jet fuel and 1,000ppm gasoil. These are calculated by adding freight rates for 37,000t tankers from northwest Europe to west Africa onto Argus' fob northwest European heating oil, jet fuel and benchmark Eurobob gasoline barge assessments.
