Drivers in Burundi are so anxious for gas that they sleep on the forecourts of gas stations. Senegal has such a scarcity of jet fuel that Air France's aircraft from Dakar to Paris has had to stop at the Canary Islands to refuel. The similar issue exists in Johannesburg, prompting United Airlines to cancel several flights from New York.
Africa has been short of the lifeblood of contemporary economies, from Kenya, which recently had its worst petrol deficit in a decade, to Lagos, where lineups outside gas stations backed up into highways, and Cameroon, where hundreds of truckers have been stuck without diesel. "Everywhere, everyone is racing for fuel," says Anibor Kragha, president of the African Refiners and Distributors Association.
The financial costs of shortages are enormous. They put trade to a standstill, forcing millions of companies to close due to a shortage of energy, and forcing vacationers to cancel visits due to a lack of planes. This is a setback for tourism, which accounts for a significant portion of GDP in many African countries. The societal impact is also significant. Hospitals are unable to obtain medications, and ambulances are stranded. Politicians are jittery as a result of all of this. Angry citizens might easily riot in the streets as a result of shortages.
Last year, as economies recovered from the recession, there was a boom in demand for gasoline all across the world. Despite this, worldwide refining capacity declined for the first time in 30 years, forcing gasoline prices to climb. The invasion of Ukraine by Russia drove them even higher. Fuel has been available in most locations.
But not in Africa, where, according to Pierre Barbe, the Africa business manager at Vitol, the world's largest independent oil trader, is experiencing its worst supply crisis in 40 years.
The shortages aren't merely the result of increasing costs, which have rendered gasoline expensive in many regions of Africa for the poor. According to Kristine Petrosyan of the International Energy Agency (IEA), an international think tank, they have also been triggered by a number of other market shifts that have a special impact on Africa.
Financial markets are commonly used by fuel merchants to reduce the risk of price changes. When prices are high and volatile, however, they must spend significantly more (and tie up more working capital) on hedging.
Importers to Africa are often smaller and have narrower balance sheets than those in wealthier nations. Many people just import less petrol to save money.
A flip in the futures market has exacerbated the problem: the price for oil supplies at a later date has fallen substantially below the price for immediate delivery. Traders used to dock hundreds of fully loaded oil tankers (known as "floaters") off the coast of West Africa to wait for better prices. Traders now aim to unload them as rapidly as possible and ship them to Asia via the Suez Canal, bypassing Africa entirely.
Many Sub-Saharan African countries are particularly susceptible since they acquire in modest quantities from passing floaters or tankers.
While many wealthy countries have a 90-day supply on hand, few sub-Saharan African countries have. Although data on this is scarce, it is obvious that the region has limited storage capacity.
A second weakness is that Sub-Saharan African countries process very little oil at home. Many of their refineries are poorly operated, operating at a fraction of capacity or being too small to compete. According to the International Energy Agency, refinery production in Sub-Saharan Africa has decreased by half in the last decade, despite a 19% increase in oil consumption in the area. Sub-Saharan Africa today imports more refined goods than any other area, accounting for almost three-quarters of total imports.
As a result, it is extremely vulnerable to external shocks. West Africa is particularly at risk. Senegal,
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