Page 9 - AfrOil Week 20 2022

AfrOil COMMENTARY AfrOil

They are also playing a role in Brazil’s upcoming as Bolsonaro, a right-wing populist who has
presidential vote. The country’s incumbent Pres- moved away from his earlier statements in
ident Jair Bolsonaro, who hopes to retain his job favour of market economics, is running against
in the October election, depends on the political leftist candidate Luiz Inacio da Silva.
support of Brazil’s independent truckers. As a
group, these truckers wield considerable influ- Asia
ence, and they are outraged at the NOC Petro- Across the Pacific, lockdowns in China have
bras’ decision earlier this month to increase offered something of a reprieve to diesel and
domestic diesel prices to keep them more or less jet fuel markets, dampening demand at a time
in line with world market trends. when the war in Ukraine and sanctions on Rus-
This stance is understandable from a political sia have caused jet fuel prices to spike. However,
perspective, but the truckers have threatened to there have been warnings that as Chinese lock-
stage a national strike and mount road block- downs eventually ease and demand rebounds,
ades on May 21 to express their discontent. If Russian supply will decline further and prices
these protest actions continue beyond May 21, can be expected to rise higher still.
they have the potential to wreak great havoc on The surge in jet fuel prices – up more than
the Brazilian economy, which is still working to 50% so far this year – has come as more and
recover from the ravages of the pandemic. This more Asian countries are lifting pandemic-re-
is not a theoretical matter, as it has happened lated travel restrictions. It threatens to under-
before. Many Brazilian voters still have vivid mine the impact of this reopening for airlines.
memories of the 10-day truckers’ strike in 2018 There are some bright spots, such as new
that ended up paralysing the country for weeks. refining capacity coming online in Asia fol-
Bolsonaro, of course, is taking the truckers’ lowing delays that have been attributed to the
side – and taking Petrobras to task for raising pandemic and to weak refining margins. The
prices, even though the company is not required situation has now changed, with Asian refiners
to take the government’s policy considera- reported to be reaping record profits in recent
tions in mind when setting tariffs. He has also weeks as the region also ramped up exports to
replaced the state-owned company’s CEO and Europe in a bid to help replace a shortfall of Rus-
appointed a new cabinet member to head the sian fuel.
governement department following the resigna- However, with many refiners (at least outside
tion of Mines and Energy Minister Bento Albu- China) already running at full capacity, there is
querque. Additionally, Albuquerque’s successor limited potential to ramp up fuel production as
Adolfo Sachsida has started talking about the demand continues to rise. China is an exception
possibility of privatising Petrobras – apparently as lockdowns there persist. Refinery through-
because the president is tired of being blamed put in the country was down 11% year on year
for its unpopular decisions and not just because in April and had fallen to its lowest level since
a sell-off might improve its performance. March 2020. Chinese refinery output can thus
These developments all but guarantee that be anticipated to rise as lockdowns in that coun-
Petrobras’ fate and pricing will be part of the try ease – but so too can the country’s domestic
discussion in the run-up to Brazil’s presidential fuel demand, and thus the potential to ease the
election. The discussion is likely to be spirited, looming fuel supply crunch remains limited. ™

PROJECTS & COMPANIES
Bolloré wins logistics contract for EACOP

UGANDA/TANZANIA BOLLORÉ, an international transport and “The expertise of Bolloré Logistics world-
logistics company, has been awarded a contract wide will ensure efficient logistics operations
for logistics services related to the construc- from global origin locations to the main project
tion of the East African Crude Oil Pipeline discharge port in Dar es Salaam, Tanzania,” the
(EACOP), which will be the world’s longest elec- statement said.
trically heated crude oil pipeline, the company The contract will provide crucial support for
said in a statement. the construction of EACOP, a 1,443-km buried
Under the contract, which will be imple- pipeline that will transport about 216,000 bar-
mented by Bolloré Logistics subsidiaries in rels per day (bpd) of crude oil from Uganda’s
Europe, Uganda and Tanzania, the company western Kabaale district to Tanzania’s Indian
will be responsible for the end-to-end receiv- Ocean coast.
ing, storage, handling and transportation of The project’s shareholders include TotalEn-
hundreds of thousands of cubic metres of cargo, ergies (France), China National Offshore Oil
including over 80,000 units of 18-metre line- Corp. (CNOOC), Uganda National Oil Co.
pipe, as well as multiple heavy-lift operations (UNOC) and Tanzania Petroleum Develop-
and other tasks. ment Corp. (TPDC).

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