Kenya is anxiously tracking a Red Sea tanker carrying fuel from the Middle East critical for the country’s economy, while South Africa braces for higher pump prices, as the US-led war with Iran raises fears of broader supply shocks in Africa.
Authorities are keenly monitoring a fuel loading planned for Friday, said Daniel Kiptoo, director general of Kenya’s Energy and Petroleum Regulatory Authority, without giving more details or identifying the vessel. The government will be concerned if the scheduled cargo doesn’t load, he said.
Kenya’s concerns reflect those of buyers around the world as the war in the Middle East chokes off energy supplies that have driven up prices of oil and gas. The East African nation, which lacks fuel production facilities, renewed a supply contract last year with Saudi Aramco, Emirates National Oil Co and Abu Dhabi National Oil Co.
While nations on the continent produce several millions of barrels of crude oil a day, they lack refining capacity and must import most of their petroleum products from the Middle East. “There will definitely be an impact, based on past experiences,” said Avhapfani Tshifularo, chief executive officer of Fuels Industry Association of South Africa, a lobby group.
The most industrialized nation on the continent experienced supply issues around diesel after the invasion of Ukraine, prompting the government to suspend some fuel levies.
And despite that experience, governments are woefully under prepared.
Kenya’s proposal to build three months of strategic fuel reserve never took off because the government didn’t have the $1bn needed to implement the plan, according to Kiptoo.
South Africa shut about half of its refining capacity in recent years, growing dependent on imports to meet fuel demand. The Middle East made up the majority of diesel shipments in 2024, according to a Fuels Industry report.
The nation’s Department of Mineral Resources on Thursday said it planned to weigh options “to mitigate the potential impact of the fuel prices due to the conflict in the Middle East.” It implemented a temporary reduction in fuel levies in 2022 when fuel surged.
While supplies haven’t been disrupted yet, “the unknown picture is what happens over the longer term,” Tshifularo said, adding that South Africa has virtually no strategic fuel stocks.
For African nations, higher diesel prices in Europe are another risk. Suppliers — including billionaire Aliko Dangote’s refinery in Nigeria — will likely sell to the highest bidder.
Some nations on the continent “may be forced to reduce or delay import volumes,” energy consultancy CITAC said in a note on Thursday.
Nations where prices are capped could experience increased pressure to either raise pump prices or reduce supply, with evidence already emerging “of local marketers hiking prices above official caps,” CITAC said.
Many African countries carry less than three weeks of demand cover, with some holding only a few days’ worth, according to CITAC.
“Even where stockholding policies exist, they are rarely enforced,” it said.
Malawi had just 15 days of fuel cover even before the war, according to Justin Saidi, chief secretary to the government. In Somalia, where fuel prices are up more than 40%, the government met business leaders to discuss how to limit the impact on consumers.
