Road fuels
Overview
Fuels for road transportation continue to drive the refining industry. But gasoline and diesel are coming under increasing pressure from low-carbon targets being implemented around the world.
Global oversupply, new regulatory measures and rapidly increasing competition for export markets are affecting refining margins. The need for accurate insight and data is more critical than ever.
Argus road fuels coverage includes price assessments and key insights into both conventional fuels - gasoline, distillates and blending components – as well as biofuels, in each key region. Our trusted prices are delivered alongside the latest market-moving news, in-depth analysis, supply and demand dynamics, price forecasts and forward curves data.
Latest road fuels news
Browse the latest market moving news on the global road fuels industry.
Dangote refinery starts Nigerian gasoline sales
Dangote refinery starts Nigerian gasoline sales
Lagos, 16 September (Argus) — Nigeria's 650,000 b/d Dangote refinery has started selling gasoline to the domestic market with state-owned oil firm NNPC as the sole offtaker. NNPC said earlier today that it is paying Dangote in US dollars for September gasoline loadings. The firm's previously announced crude-for-gasoline swap programme with Dangote will be settled in the local currency and will start on 1 October, it added. NNPC published a Dangote gasoline ex-refinery price of $736/t, or 898.78 naira/litre ($0.55/l), based on spot prices from 13 September. This equates to N842.61/l plus a Dangote premium of N56.17/l. Gasoline prices "are not set by government but negotiated directly between parties on an arm's length", in line with the provisions of Nigeria's Petroleum Industry Act, NNPC said. Dangote provided videos of gasoline loading onto NNPC branded trucks at its gantry on the outskirts of Lagos on 15 September. NNPC issued a statement the previous day saying it had "deployed over 100 trucks, with hundreds more en route" for the start of gasoline sales. Dangote previously said the refinery has the capacity to load 2,900 trucks a day, in addition to three single point mooring (SPM) facilities, 25km offshore, that can load product onto 20,000-130,000t tankers. NNPC has supplied gasoline to the domestic market almost exclusively since 2017, relying heavily on imports from overseas because of the parlous state of its own refineries. The start of gasoline loadings at Dangote will enable Nigeria to significantly reduce its dependence on gasoline imports. NNPC's statement today about gasoline pricing comes against a backdrop of President Bola Tinubu adopting a gradual reduction of the country's longstanding gasoline subsidy instead of his stated policy goal of removing it in one fell swoop. His administration made that decision in response to a cost-of-living crisis and social unrest following last year's initial attempt to remove the subsidy. Based on Dangote's ex-refinery price, regulatory fees of N9.96/l, distribution costs of N15/l and a margin of N26.48/l, NNPC said it has arrived at an estimated retail price of N950.22/l for gasoline in Lagos. That is 11pc higher than the level to which it hiked prices at its Lagos retail stations on 3 September. The company attributed that hike to the government reducing the extent to which it subsidises gasoline. Still ramping up Dangote said previously that it expects to be able to produce 57mn l/d (365,000 b/d) of gasoline at full capacity, more than enough to cover Nigerian demand, which it estimated at about 33mn l/d. But industry sources told Argus the refinery was only able to supply NNPC with 16mn l of gasoline over the weekend. The refinery is still some way off reaching capacity, with crude feedstock supply falling by 34pc on the month to 185,000 b/d in August, according to Argus tracking. Argus reported last week that Dangote is yet to complete the start-up of its residual fluid catalytic cracker (RFCC), which is holding the refinery back from hitting its gasoline production capacity. Test runs may have started on the unit, but it is unlikely to be fully operational until October or November. NNPC said it supplied Dangote with 4.8mn bl of crude in August, down from 5.1mn bl in July. It said it will supply the refinery with 5.4mn bl this month and 11.7mn bl in October. The projected crude supply for October is a slight increase from the 11.3mn bl that NNPC announced on 5 September but a touch lower than the volume outlined by Nigeria's coordinating minister of the economy Wale Edun. "From 1 October, NNPC will commence the supply of approximately 385,000 b/d of crude oil to the Dangote refinery, which will be paid for in naira," Edun said on 15 September. In return, the Dangote refinery will supply gasoline and diesel "of equivalent value to the domestic market to be paid for in naira", Edun said. "Diesel will be sold in naira by the Dangote refinery to any interested offtaker," he said. But gasoline "will only be sold to NNPC. NNPC will then sell to various marketers for now". By Adebiyi Olusolape and George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Colombia’s old troubles hurt Petro’s new energy drive
Colombia’s old troubles hurt Petro’s new energy drive
A new tax on oil and coal producers may further undermine investment and energy security, writes Carla Bass Houston, 13 September (Argus) — Entrenched subsidies, violence and social conflict that have long plagued Colombia's traditional hydrocarbon producers are now hurting Colombian president Gustavo Petro's ambitious plan to move abruptly to cleaner energies and break dependencies on crude and natural gas. Some Colombian families had to resume burning wood for cooking fuel in early September — an energy transition in the opposite direction — after truckers blocked roads in protest against the end of diesel subsidies, slowing deliveries of alternative household fuel LPG. And around the same time, a series of new attacks on Colombia's oil pipelines following the breakdown of peace talks between the government and leftist guerrilla group ELN hobbled crude flows. Indigenous communities in late August temporarily took over a gas processing plant important to LPG output to demand more social spending in their territories. And the country recently experienced a new shortfall of refined products, when a refinery shutdown cut into its barely balanced jet fuel supply. Energy shortages were not part of Petro's transition plan, but these and similar incidents have not swayed him from an energy policy based on not awarding new oil and gas exploration contracts, even with slightly less than two years left in his term. Ratcheting down on hydrocarbon use before cleaner sources of power are in place could put Colombia at risk of an even wider gap in its energy supply. Bogota forecasts relatively flat crude production for 2025, at 763,000 b/d — just 2pc higher than this year but 2pc lower than in 2023. Output will begin to decline in 2027 without new exploration contracts, Colombian petroleum association ACP says, which is sooner than the finance ministry's projection that it will start falling in 2030. This would reduce the roughly 400,000 b/d of crude available for export as well as the approximately 360,000 b/d used to feed its refineries, according to data from the government and state-controlled Ecopetrol. Oil and oil products represented 32pc of the country's export value in 2023, ACP calculates. Frac cocaine This outlook is not deterring the Petro administration from its path. The president — who has referred to hydrocarbons as a poison like cocaine — recently opposed a deal with US firm Occidental Petroleum that would have added 65,000 b/d to Ecopetrol's production in the Permian basin in Texas, because of his opposition to hydraulic fracturing. The administration is also pushing for congress to approve a complete ban on the drilling method in Colombia owing to environmental concerns. The government has proposed adding a new tax on oil as well as coal producers — another key Colombian export — that many in the industry have said will further reduce investment incentives even under existing contracts. Without more investment — and a return to new exploration contracts — Colombia is putting its energy security at risk needlessly, producers warn. The administration of the country's previous president, Ivan Duque, had outlined an energy transition strategy that was more akin to Brazil's push under President Luiz Inacio Lula da Silva — to increase hydrocarbon production temporarily, to help pay for the costs of later moving to cleaner energies. But Ecopetrol — long seen as a regional leader in terms of its transition strategy — had to reduce green spending planned for this year because of budget constraints. Petro's strategy would see Colombia fall in its ranking as a leading regional oil producer. Guyana's output is likely to surpass Colombia's in 2025, and possibly more than double it in 2026. Petro is up for re-election in 2026, but his popularity has declined while in office because of changes to health care, energy shortages and corruption allegations. Colombia's crude production looks set for a similar decline. Colombia crude production forecast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BZ Credits near 5 year high after 2023 blending
BZ Credits near 5 year high after 2023 blending
Houston, 12 September (Argus) — Higher volumes of ethylbenzene (EB) into gasoline blending a year ago has led to a credit shortage, pushing prices to their highest levels since March 2021. In 2022 and 2023, US Gulf coast (USGC) naphtha inventories were long as US naphtha exports declined from 400,000-500,000b/d pre-pandemic to 100,000-200,000b/d. Over the same span of time, refiners and blenders dropped excess naphtha, a sub-octane blendstock, into the gasoline pool. This blend of gasoline spurred demand for high-octane blendstocks like EB, toluene and mixed xylenes into gasoline blending. The US Environmental Protection Agency (EPA) requires gasoline with benzene content above a certain threshold to be offset by a credit generated by refining compliant gasoline. The elevated blending of EB exhausted the supply of benzene credits on the open market, which bled into 2024. Credits traded near 100¢/USG early in 2024 and rose to as high as 190¢/USG over the summer. Values now span buyer interest at 160¢/USG and seller interest at 190¢/USG. The compliance deadline for benzene credit submission is set for 31 March 2025, in which refiners must mass-balance their production over a given year and either face a credit surplus for being over-compliant or a shortage and therefore will need to procure credits on the open market. By Jake Caldwell and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US summer gasoline demand lagged pre-Covid levels
US summer gasoline demand lagged pre-Covid levels
Houston, 11 September (Argus) — US gasoline demand ended the 2024 summer driving season well below pre Covid-19 pandemic norms and at the lower end of average post-Covid levels. US summer driving season gasoline demand — measured from the last Monday in May to the first Monday in September — averaged 9.1mn b/d this year, according to US Energy Information Administration (EIA) weekly demand data released Wednesday. That is up by 49,000 b/d from the same period in 2023 and up by 291,000 b/d from 2022 but well below the 9.4mn b/d levels in the summer of 2021 when demand surged in the wake of the pandemic as the US economy reopened. In the ten years prior to the pandemic, weekly US gasoline demand averaged 9.3mn b/d in the peak summer months ( See chart) . Even as Americans drive more than ever , demand has failed to keep pace, likely due to increases in the efficiency of internal combustion engines and fully-electric vehicles (EVs) and hybrids comprising a greater portion of the automotive fleet. The weekly EIA data released Wednesday is less accurate than the monthly numbers published by the agency at a lag, but those too have shown summer demand below pre-pandemic levels . Gasoline demand was 9.1mn b/d in June, the most recent monthly data, down by 246,000 b/d from the same month last year and down by 583,000 b/d from June 2019. Future outlook lowered The agency has also downgraded its demand outlook in recent days. On Tuesday it lowered its demand, price and inventory expectations for road fuels such as gasoline in its monthly Short-Term Energy Outlook (STEO). The agency revised down its expectations for gasoline demand in the second and third quarters of this year by 1.1pc and 0.4pc respectively to just over 9.1mn b/d. Demand in the second quarter of next year is expected to be 30,000 b/d higher than this year, but third quarter demand is expected to be 90,000 b/d lower, helping drive an overall 20,000 b/d gasoline demand decline next year. Headed into the third quarter, US refiners have been cutting runs after weaker-than-expected summer gasoline demand raised inventories and narrowed margins. Refiners also take plants offline for maintenance in the fall amid seasonally narrower margins. Access to the export markets could be a hedge against an uncertain domestic demand outlook, and several coastal refineries up for sale in North America could give a buyer access to global markets for the road fuel. US refiners have steadily exported more gasoline since about 2007, sending 298mn bls overseas last year compared to 46mn bls in 2007. By Nathan Risser US summer driving season gasoline demand ’000 b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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