Benchmark non-oxy Eurobob gasoline barge cracks surged to the highest for more than two years today as European gasoline cargo bookings for Nigeria ramp up before import duties take effect on refined product cargoes landing in the country.
Gasoline cracks to Ice Brent jumped by 24pc on the day to settle at $28.50/bl. This marked the strongest refining margin for gasoline since 31 August 2023 when peak seasonal summer demand coincided with the fallout in downstream markets triggered by Russia's invasion of Ukraine.
On gasoline, west Africa is "pulling pretty much everything", one European trader said today. Another trader based in Nigeria said importers were "scrambling" to bring in product ahead of incoming import tariffs. Nigeria's government has approved a 15pc import tariff on gasoline and diesel to strengthen energy security and protect local refining, according to a signed government letter seen by Argus.
But the date of implementation remains ambiguous, the local trader said, citing the need for a ‘notification' before the 30-day transition begins. This ambiguity may be spurring on early import buying interest ahead of the Christmas period. Nigeria tends to increase gasoline imports in the run up to this holiday period, when seasonal gasoline demand typically peaks in the country.
Renewed crack strength today was also partly the result of a divergence in gasoline and underlying crude values. Prices were assessed up by $36.50/t on the day at $761/t — the highest since mid-June — while Ice Brent futures slumped by $2.39/bl to $62.86/bl.
Additional gasoline demand emerged in the form of a tender issued by Egypt's state-owned EGPC for four handy-size gasoline cargoes for delivery in January and three handy-size deliveries in February, according to the European trader.
The developments adjoin a growing list of supply-side fundamentals which helped push gasoline cracks to an 18-month high only on 10 November.
Gasoline premiums to Ice Brent were already underpinned by uncertainty over the future of Litasco refinery assets in Europe, which account for 2pc of the continent's refining capacity. In addition, European refinery maintenance and tighter prompt supply availability had been lending support to the rally, according to traders. Gasoline barge loading delays have also been reported since late September-early October, limiting the amount of product making its way into storage.
