Fuelling Africa’s Potential: Bridging the Gap in Energy Infrastructure
Bridging the Gap
CITAC’s White Paper titled “Fuelling Africa’s Potential: Bridging the Gap in Energy Infrastructure” aims to highlight the key challenges associated with supplying fuels at scale into African markets. Rapid population and economic growth are driving demand for energy ever higher, while key infrastructure such as ports and roads is increasingly congested.
Rising demand means existing strategic stocks of products cover fewer and fewer days of consumption – increasing the risk of crippling fuel shortages in the event of supply disruptions. By mapping out demand across key supply locations and trajectories, CITAC has identified bottlenecks which are expected to appear through to 2040 with the aim of supporting government and private firms in making the appropriate changes to the regulatory landscape and investments in infrastructure which are required to avoid impending supply constraints. Another aim of the paper is to highlight inefficiencies in the supply chain with the goal of improving supply economics to reduce the costs borne by the consumer, business, and government in consuming fuels.
This paper has been commissioned by Puma Energy, a company specialising in the supply and distribution of fuels to consumers worldwide and with an expansive experience across its operations in Africa. CITAC and Puma Energy are aligned in recognising the immediate and future challenges that African fuel supply chains face and CITAC is happy to play a part in the on-going process of addressing bottlenecks and improving supply economics to the benefit of African consumers.
Download the paper here
Infrastructure investment & efficiency gains unlock energy security and billions in savings for consumers
The paper focuses on the need to meet Africa’s burgeoning fuel demand. CITAC forecasts clean product demand to grow by 56% from 2022 levels to 142mn mt/yr in 2040, driven by economic expansion and population growth: the continent’s population is projected to rise by 50% (or 600mn people) over the same period. This rapid demand growth will bring with it logistical, planning, and infrastructural challenges among others.
Today, much of the mid- and downstream product supply infrastructure is ageing and uneconomical. The paper highlights points along the supply chain where there is potential for unlocking value through investment: expansion of port capacity, construction of world-scale storage terminals, development of pipelines and similar infrastructure projects.
Aside from direct investment in infrastructure, there is the potential to improve supply chains through the adoption of best practise and improved efficiency. This includes streamlining border controls and customs procedures, accelerating truck loading and evacuation policies, and similar debottlenecking efforts. These measures have the additional advantage of reducing the number of trucks required to serve demand, bringing with them an environmental dividend as emissions related to energy distribution are cut and road congestion eased. The number of road traffic accidents could also be lowered. Such efforts have the potential to bring significant cost savings of between 0.3% of 2023 GDP in RSA to as high as 5.4% of 2023 GDP in Mozambique.
Building on the market analysis carried out in the paper, CITAC delivers key recommendations for governments and other market participants aimed at ensuring economical, efficient, and secure supply of fuels to African markets.
CITAC: the leading downstream African energy specialist
CITAC is a downstream energy consultancy specialising in African markets. The company produces a range of market intelligence reports available on a subscription basis and also provides consulting services to companies operating in the African energy space.
CITAC’s latest developments include the launching of its Energy Transition Service which provides expert analysis and information on the evolving energy landscape in Africa, encompassing carbon credits generation & trading, electric vehicle initiatives, pioneering use of new fuels such as methanol and biogas, government regulations, renewable energy projects and similar milestone changes.