Oil demand in Africa will climb at a faster pace than most of the world in the next five years because of rising transport and power-generation needs, a report by the IEA showed.
Gasoline and gasoil consumption are each forecast to rise 4.5 percent a year, while the use of jet fuel or kerosene will advance 3.9 percent, the International Energy Agency said in its medium-term oil market report today. The gains will boost Africa’s oil use by 4 percent a year from 2012 to 2018 compared with an average of 1.2 percent growth globally for that period.
“The very low historical base of African demand and the region’s rapid income gain mean that great leaps in demand growth may be in the cards,” the Paris-based agency said. “The prospect of excess global gasoline and naphtha production in the next few years could set the stage for an abundance of light ends looking for new market outlets.”
Consumption of liquid petroleum gas, seen as a transition fuel between burning wood and municipal gas in emerging economies, is growing because it’s easy to distribute and several countries have been building plants and terminals for the gas, according to the report.
Africa’s crude-refining capacity reached 3.47 million barrels a day last year, which should be enough to meet demand, while an average plant utilization rate of 60 percent keeps the continent a net fuel importer, the agency said.
Lack of roads, security challenges, corruption and governance issues may block “a real takeoff in African oil demand,” the IEA said.