CAPE TOWN, South Africa – Half of Africas 54 countries have passed legislation regulating imports of used vehicles – either banning them completely or capping the age of units that can be brought in – and this is changing fleet mixes and gradually impacting base stock needs, an ExxonMobil official said at a conference here.
Speaking at the ICIS African Base Oils & Lubricants Conference, ExxonMobil Market Development Advisor Rakesh Vyas said governments are limiting ages of vehicle imports at least partly to reduce emissions of greenhouse gases and air pollutants within their borders. Depending on the country or origin, newer vehicles were generally built to comply with tougher emissions standards, which in turn require engine oils formulated with higher portions of API Group II or III base stocks.
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A countrys ability to meet their emission standard commitment is obviously impacted by the policy and the legislation they implement on used vehicles as well as many other factors,” Rakesh told LR EMEA on the sidelines of the ICIS Conference. This has a direct connection to average car parc age and indirectly to the oil categories and base stocks required to meet the lubricant needs within that country.”
During a presentation, Vyas explained that four countries in Africa have completely banned import of used vehicles, while others have banned used vehicles of different ages. For example, 10 countries have banned imports vehicles older than three to five years and 13 have capped ages at between six and 12 years. Twenty-seven countries have no such regulation. Egypt allows import of used electric vehicles, and Algeria allowed non-individual importers. In some cases, instead of an outright ban, a country has high taxation or penalties for imports of used vehicles older than the age cap.
The variations in legislation lead to mixed fleet by age across countries in Africa, resulting in the requirement for varying categories of base stocks across the continent. Overall, oil quality is improving from a relatively low level, said Najib Aragrag, base stocks technical advisor, for Exxon Mobil Base Stocks and Specialties, who co-presented with Vyas. SAE 40 monogrades accounted for approximately 43 percent of passenger car engine oil demand on the continent in 2017, Aragrag said, but their share is expected to fall to around 37 percent by 2026. Meanwhile the share of 15W multigrades should rise from approximately 14 percent to around 16 percent, while 10Ws and 5Ws each gain a couple percentage points.
As a result, Africas demand for more highly refined base stocks is rising. Global demand for Group I oils has been falling and is expected to decrease 16 percent between 2020 and 2025, ExxonMobil predicts, but Africas Group I demand will grow by about 6 percent during that period. Demand for Groups II through Group IV are expected to grow by 13 percent but still account for only a small portion of the regions demand.