Caught between riots and debt crises, African countries cut fuel subsidies

Abdoulaye Diallo is paying over 50% more to fill up his "thiak-thiak" motorbike taxi in Keur Mbaye Fall, a suburb of Senegal's capital Dakar, than he was before the government began lifting fuel subsidies in January, said Hydrocarbonprocessing.

Diallo, 25, is already navigating punishing inflation and deadly political riots, but his biggest problem is he cannot pass on the cost of filling his fuel tank, which has risen to 3,500 CFA ($5.82), from 2,000 CFA last year. "The customers...don't realize how difficult it is," Diallo said. "That's the kind of thing we need to protest against."

Senegal, like Nigeria and Angola, is removing costly fossil fuel subsidies – a move once considered politically unthinkable but which has become a necessity due to crushing debt, a spike in borrowing costs and high fuel prices.

Global spending on fossil fuel consumption subsidies doubled to a record USD1 trillion last year as the war in Ukraine sent oil prices skyrocketing, according to the International Energy Agency (IEA).

Senegal's fuel and electricity supports gobbled up 4% of GDP last year, while Nigeria spent $10 billion capping the price of petrol. Angola spent 1.9 trillion kwanza (USD2.3 billion) in 2022, which is more than 40% of what the IMF estimated it spent on social programs.

"The cost is too high for us to continue to pay," said Stanley Achonu, Nigeria director of the ONE Campaign, which advocates for sustainable debt and an end to poverty.

We remind, India bought 60% of all Russian Urals oil exports in June with strong demand from all refiners, while shipments to China dropped to just 7% as independent refiners slowed buying, trading sources and Refinitiv Eikon data showed.

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India bought 60% of all Russian Urals oil exports in June with strong demand from all refiners, while shipments to China dropped to just 7% as independent refiners slowed buying, trading sources and Refinitiv Eikon data showed, said Reuters.

Urals is Russia's main export grade from its European ports and represents about a half of total Russian oil exports. The country, subject to severe Western sanctions over its actions in Ukraine, also exports oil from its Pacific ports, its Arctic ports and via a direct pipeline to China.

Russia has heavily relied on India, China, Turkey and Bulgaria for oil sales since the imposition of sanctions. Any change in appetite for crude in those countries has an immediate impact on Russian exports, revenues and budget, which has been strained by military spending.

Russian oil production cuts and higher refinery runs hit supplies of Urals to the Chinese and Turkish markets in June, while India retained its top share in purchases, Reuters calculations based on two trading sources and Refinitiv Eikon data showed on Tuesday.

In June, oil shipments from the Russian ports of Primorsk, Ust-Luga and Novorossiisk fell to 9.4 million tons (2.3 million barrels per day) from 10.32 million tons (2.42 million bpd) in May, when loadings from the state's western ports were at their highest since 2019.

On Monday, Russia pledged to make an additional 500,000 barrel per day output and export cuts in August. Urals oil shipments to India in June stood at about 60% of total Urals shipments, in line with May, according to Reuters calculations based on Refinitiv data and sources. Overall India's imports of Russian oil in May reached a new all-time high of 1.95 million barrels per day, accounting for about 40% of the total supply of crude oil to the country, while the share of OPEC suppliers continued to decline.

Demand for Urals in India was supported by attractive pricing for the Russian barrels compared to competing Middle Eastern grades and lower freight rates from Russian ports. According to Refinitiv data available to date, shipments of Urals oil to China from Russian ports and ship-to-ship (STS) locations fell to just 7% of Urals seaborne exports, down from 13% in May. The fall in June-loading Urals supplies to China was due to weaker demand from Chinese independent refiners that held back from buying due to a shortage of crude import quotas.

Deliveries of Urals oil to Turkey decreased in June to 8% of total Urals seaborne shipments from 11% in May. Turkey though replaced China as the second biggest Urals oil buyer by sea. Deliveries of Urals oil to Bulgaria, which is allowed to continue seaborne oil imports despite EU embargo on Russian oil, retained its fourth place as the biggest buyer of the cargoes with 6%, up from just 3% in May.

Urals oil supplies to ship-to-ship (STS) facilities rose in June to 19% of all grade's loadings from 11% in May, according to the data, with final destinations for these volumes yet to be determined.

We remind, Russia's energy ministry said it sees no shortage of gasoline in the domestic market, with companies having cut their exports and increased production after gradually completing planned maintenance work. The ministry also said some refineries have not yet completed repairs, and oil companies are following government recommendations to systematically reduce exports. As a result, in June, gasoline exports fell 30% from May. The ministry continues to recommend that companies adhere to the policy to curb exports.

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Evonik has acquired Novachem, an Argentinian sustainable cosmetic actives innovator, said the company.

Novachem offers a strong, innovative portfolio of biotechnological, natural and sustainable cosmetic active ingredients with scientifically proven claims that will boost Evonik’s portfolio of System Solutions. The company is based in Buenos Aires in Argentina and has 20 employees. Signing and closing took place on 30 June 2023, subject to official approval by the authorities.

Novachem will be integrated into Evonik’s Care Solutions business line within the life sciences division Nutrition & Care. By leveraging Novachem’s innovation strategy, accessibility to biodiversity and strong skin and hair care portfolio, Evonik will boost its Systems Solutions portfolio and take a further step in the transformation of the Care Solutions business towards becoming a leading actives provider.

“We are excited to welcome Novachem to our Evonik family. By leveraging our complementary knowhow and access to markets in the Americas and worldwide, we will be a step closer to achieving our goal of becoming the preferred sustainable specialties partner,” said Yann d'Herve, head of Evonik's Care Solutions business line.

Guided by a vision that puts sustainability, innovation and collaboration at its core, Nutrition & Care aims to increase its share of System Solutions from 20 percent to more than 50 percent by 2030. System Solutions are multi-component offerings across products, technologies and services that are tailored to a unique customer need and often have proven sustainability benefits.

“Latin America is one of the most biodiverse regions in the world. The acquisition of Novachem will enable us to bring even more innovative and sustainable solutions to our customers in the personal care market,” said Hendrik Schonfelder, regional president Central & South America Region at Evonik.

Novachem develops biotechnological, natural, and sustainable active ingredients for skin and hair care applications. Since its inception in 2007, the company has applied science and technology to create innovative eco-certified actives from live microorganisms that meet the trends of the cosmetics market.

We remind, Covestro and Evonik as well as the consulting firm Accenture invited managers from production and technology divisions of Bayer, Clariant, Wacker, Shell, Lanxess and other companies to a two-day Chemicals Peer Exchange for the fourth time.

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China Petroleum & Chemical Corporation announced that the Green Hydrogen Pilot Project constructed by the company in Kuqa City of Aksu Prefecture, Xinjiang Uygur Autonomous Region, has commenced operation, said Polymerupdate.

The official operation of the plant, which harnesses solar energy to generate green hydrogen, marks a major stride forward in Sinopec's technological exploration to produce clean hydrogen as it empowers the country to transition to a greener and more sustainable energy system.

Spearheaded by Sinopec's New Star Company, the mega project is the largest solar-to-hydrogen project in the world and the first of its kind in China that is equipped with a photovoltaic power generation complex, power transmission and transformation lines, as well as facilities for water electrolysis hydrogen production, hydrogen storage and transportation, and supporting auxiliary production.

Green hydrogen is produced by facilities powered by renewable power sources such as solar and wind energy, minimizing the carbon footprint across the entire production process. The Project takes advantage of the wealth of photovoltaic resources in Kuqa to achieve 20,000 tons per annum of green hydrogen by using solar power to electrolyze water, along with the capacity to store 210,000 cubic meters of hydrogen and transport 28,000 cubic meters per hour.

As a demonstration project that serves to carve out a new path for green hydrogen refining and provide an exemplary model for green hydrogen production in China, the Project supplies hydrogen to Sinopec's Tahe Refining & Chemical to remove its fossil fuel-based electricity used for hydrogen production, which is expected to help it reduce 485,000 tons of carbon dioxide emissions annually.

With a focus on hydrogen-powered transportation and green hydrogen refining, Sinopec aims to launch itself to become a new energy powerhouse that pioneers hydrogen production innovation in China, facilitating China and beyond to achieve low-carbon targets in the coming years. With an annual hydrogen production and utilization capacity exceeding 4.5 million tons, Sinopec's self-developed megawatt-scale PEM electrolysis hydrogen production station has entered operation, and its first hydrogen demonstration project in the Inner Mongolia Autonomous Region, which is expected to produce 30,000 metric tons of hydrogen a year, has been launched in 2023.

We remind, Sinopec has completed trial runs at a one million tonnes-per-year ethylene plant in the southern Chinese province of Hainan that will boost exports. The facility is part of a 28.6 billion-yuan (USD4.15 billion) complex built at the site and is the second major petrochemical plant starting this year after a similar-sized facility was announced last week by PetroChina in Guangdong province.

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Power supply is returning in Kazakhstan after a significant outage affected an oil refinery, major oilfields and the CPC export pipeline, as per Hydrocarbonprocessing.

Power supply to the Atyrau oil refinery has been restored, the ministry said, while Caspian Pipeline Consortium (CPC) also said that power is back at one of its key pumping stations, called Tengiz. Fuel production at the Atyrau oil refinery in western Kazakhstan was completely halted due to a power outage, which triggered an emergency halt, a refinery official told Reuters.

Energy ministry said the affected units at the refinery will be back to operations only after thorough checks. Kazakh news website Zakon.kz reported that an emergency outage occurred at the Mangystau power plant, which also supplies power to the country's largest oilfields such as Tengiz and Kashagan.

Kazakhstan's part of the Caspian Pipeline Consortium (CPC-K) earlier said in a statement it had been left without power, forcing back-up sources to be used. "Oil is being received from suppliers as usual," CPC-K said in the statement.

Atyrau city's power distribution company said the Tengiz and Kashagan fields had switched to autonomous power sources after the outage. Kazakhstan's energy ministry earlier said the country had sufficient gasoline stocks and that the Atyrau plant outage, which coincided with maintenance works at two other Kazakh refineries, would not lead to a fuel shortage.

We remind, Atyrau oil refinery in western Kazakhstan was completely halted on Monday due to power outage. The outage caused an emergency halt at the refinery and power is yet to be restored, the official said. Separately, Kazakh news website Zakon.kz reported that an emergency outage occurred at the Mangystau plant which also supplies power to the country's largest oilfields such as Tengiz and Kashagan.

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