Tahra Sergeant, International Bunker Industry Association’s (IBIA) Regional Manager of Africa and Global Head Events, on Friday (8 March) released an article after spending a week in Cape Town with the regional and global bunker industry, taking a look at the opportunities and pitfalls of bunkering in Africa: 

Amidst maritime tensions and regional disruptions, Africa’s eastern coast is emerging as a new hub for bunkering services, signalling a pivotal shift in the marine fuels sector.

In recent times, the maritime industry has found itself navigating through a sea of challenges and changes, particularly with the persistent tensions in the Red Sea region. These geopolitical ripples have led to a strategic re-routing of vessels around the Cape of Good Hope, spotlighting the potential of African nations such as Djibouti, Kenya, Tanzania, and Mozambique to significantly bolster their bunkering services. This development is not merely a response to circumstances but a testament to the continent’s burgeoning capability to redefine its position within the global maritime economy.

Ambassador Nancy Karigithu, Kenya’s Special Envoy and Presidential Advisor for Maritime and Blue Economy, has been at the forefront of advocating for this transformative vision. Speaking at Maritime Week Africa, she emphasised the need for substantial investment in maritime infrastructure, including the development of storage tanks, pipelines, and terminals. Such enhancements are crucial for accommodating the increasing demand for bunkering services, thereby attracting international investors and stimulating economic growth along Africa’s east coast.

Ambassador Karigithu underscored the importance of collaborative ventures in this evolving landscape. She proposed that African bunkering companies forge partnerships with international shipping and fuel suppliers to leverage collective expertise, technology, and market access. This collaborative approach is pivotal for driving growth in Africa’s marine fuels sector, making it more resilient and adaptable to the dynamic demands of global shipping.

The call for bolstered maritime security was another critical point raised by Ambassador Karigithu, especially in the wake of recent shipping attacks in the Red Sea. Enhancing security measures is essential for building confidence among shipping operators, which, in turn, would lead to an increased utilisation of African bunkering services. A secure and reliable maritime environment is foundational for the sustainable growth of the bunkering sector.

The repercussions of these geopolitical and strategic shifts are already evident in the changing bunkering volumes across various African ports. For instance, the closure of Algoa Bay resulted in an immediate spike in volumes at Port Louis and Walvis Bay.

Port Louis, in particular, saw its bunkering volume double, propelled by its competitive market and the presence of high-quality, low-cost VLSFO suppliers. This saturation and competitiveness are beneficial for keeping prices favourable for shipping companies and for Mauritius, enhancing its allure as a bunkering destination.

Durban port witnessed a modest increase in bunkering activities, primarily from vessels already scheduled to call at the port. The challenges faced by Durban, particularly in selling imported MGO duty-free for export due to tax legislation issues, highlight the broader need for modernising customs and tax laws to support efficient bunkering operations in South Africa.

Cape Town and Luanda are also reaping the benefits of the current maritime shifts. Cape Town has seen significant increases in bunkering volumes, aided by the addition of two barges, despite the high local prices. Luanda, with its local refinery, has become an attractive option for buyers seeking the continent’s cheapest VLSFO, despite the uncertainties surrounding supply operations.

The emergence of Walvis Bay as a key player in capturing the rerouted trade further illustrates the dynamic changes within the African bunkering landscape. The steady increase in volumes since September, with a notable surge post-December, underscores the port’s growing significance in the industry.

These developments call for a concerted effort to modernise customs legislation and improve port operations across Africa. Such reforms are crucial for enhancing the continent’s attractiveness as a bunkering location and fostering a more efficient and competitive bunkering sector. Engaging with legislative processes and advocating for private partnerships in port management are essential steps toward achieving this goal.

As the Regional Manager (Africa), I am witnessing an era of potential growth and transformation in Africa’s bunkering sector. The continent’s strategic response to recent maritime challenges, coupled with a proactive approach to infrastructure development and international collaboration, will set the stage for a more prominent role in the global maritime economy.

The current momentum not only presents an opportunity for Africa to cement its position as a bunkering hub but also serves as a call to action for stakeholders to navigate these new waters with foresight, cooperation, and a shared vision for a prosperous maritime future.

Photo credit: International Bunker Industry Association
Published: 14 March 2024