Angola's fuel import bill for the third quarter stood at over $1.08 billion, according to the Instituto Regulador dos Derivados de Petróleo (IRDP). The country imported 1.1 million tons of fuel, mainly diesel and gasoline, which accounted for 74% of the fuel consumed during the period. This represents an 8% increase from the previous quarter. The IRDP attributed the high import bill to the global increase in fuel prices, particularly due to the conflict in the Middle East.
The majority of the imported fuel, 48%, was diesel, while gasoline accounted for 30.1%. The fuel imports came from various sources, including 1.5% from the Cabgoc-Topping de Cabinda, 24.5% from the Luanda refinery, and 74% from international markets. The country's fuel storage capacity stands at 1.2 million cubic meters, with 1.1 million cubic meters for liquid fuels. The IRDP also reported that 148,000 tons of liquefied petroleum gas (LPG) were introduced into the market during the quarter.
The LPG imports were necessary to compensate for the shutdown of the Angola LNG factory for maintenance from July 7 to August 16. The factory, which supplies 31.8% of the country's LPG, was closed for scheduled maintenance. As a result, 33.9% of the LPG was imported. The country's LPG storage capacity stands at 113,727 tons, following the expansion of the Terminal Oceânico da Barra do Dande.
Angola, one of Africa's largest oil producers, struggles with insufficient refining capacity, leading to a reliance on imported refined products. The country's only refinery, located in Luanda, has a capacity to process 65,000 barrels of oil per day but operates at around 70% capacity. The refinery's production costs are higher than those of imported fuel, according to a 2014 report by the International Monetary Fund (IMF).
Experts have suggested that Angola should explore alternatives to importing refined products, such as building a new refinery or investing in a foreign refinery. In 2017, the Economist Intelligence Unit recommended that Angola consider reducing its dependence on imported petroleum products. The unit suggested that sending crude oil to be refined abroad could be a viable option but warned that it may be expensive.
In the past, several projects have been proposed to increase Angola's refining capacity. In 2015, a consortium of Angolan and Chinese companies announced plans to invest $12.4 billion in a new refinery in the Bengo province. The refinery, expected to have a capacity of 400,000 barrels per day, was to be built in partnership with the Sonangol and Chinese companies.
The import of fuel into Angola has historically been dominated by a few major players, including the Trafigura, a Swiss multinational. However, with changes in the country's leadership and economic landscape, new players have entered the market. The IRDP's report highlights the need for Angola to develop its refining capacity to reduce its reliance on imported fuel and mitigate the impact of global price fluctuations.
Key points
- Angola spent over $1 billion on fuel imports in the third quarter, with 74% of consumed fuel being imported.
- The country's refining capacity is insufficient, leading to a reliance on imported refined products.
- Experts recommend exploring alternatives to importing refined products, such as building a new refinery or investing in a foreign refinery.
