Kenya regional oil re-export up 34pc

Money Markets

Oil tankers at the Busia border with Uganda. PHOTO | FILE 

By BRIAN NGUGI, bnjoroge@ke.nationmedia.com

In Summary

• Kenya has witnessed a consistent and significant rise in re-exports of petroleum products over the last five years with 2015 hitting 752,000 tonnes.
• The country is not a producer of petroleum but imports it for re-export to Uganda and the wider Great Lakes region.
• Several Kenyan oil marketers such as KenolKobil, OiLibya, Total and Hashi Energy currently service these markets.

Kenya’s petroleum re-exports rose 33.9 per cent last year to Sh52.9 billion on the back of huge regional demand compared to 2014.

The Economic Survey 2016 shows Kenya has witnessed a consistent and significant rise in re-exports of petroleum products over the last five years with 2015 hitting 752,000 tonnes.

In 2014, the country re-exported 561,600 tonnes worth Sh47.1 billion compared 111,100 tonnes in 2013 representing traded products of Sh9.4 billion.

In 2012 re-exports of 55,300 tonnes were registered worth Sh4.8 billion compared to 60,500 tonnes in 2011 which earned the country Sh4.8 billion.

Kenya is not a producer of petroleum but imports it for re-export to Uganda and the wider Great Lakes region. Other key markets include South Sudan, the Democratic Republic of Congo and Rwanda.

A number of Kenyan oil marketers such as KenolKobil, OiLibya, Total and Hashi Energy currently service these markets.

“Demand for petroleum products in the region has been on an upward trend in recent years just as in the Kenyan market driven by industrial growth,” said Energy Regulatory Commission (ERC) acting director of Petroleum Edward Kinyua.

Mr Kinyua said increased capacity of the Kenya Pipeline Company over the years had also helped raised margins.

“Petroleum supply has become more efficient and boosted the volumes. This means more growth in revenues for Kenya,” Mr Kinyua told the Business Daily.

Industry estimates show that more than 80 per cent of Uganda’s 715,000 tonnes annual petroleum consumption is shipped through Kenya — the bulk of it through the Kenya Pipeline Company.

The value of petroleum products available for domestic market (net balance) dropped by 41.0 per cent to Sh166.5 billion in 2015 compared to Sh282.5 billion in 2014.

Kenya is gearing to become a crude oil producer starting with 2,000 barrels crude oil exports daily by rail and road as it projects to complete its own pipeline in five years at a cost of $4.2 billion (Sh425 billion).

Energy Cabinet Secretary Charles Keter on April 28 told a parliamentary committee that the proposed pipeline from Lokichar-Isiolo-Lamu will be ready in the second quarter of 2021.

Mr Keter said Kenya is proceeding with plans to start small-scale production by next year, and that roads connecting the oilfields in Turkana to Eldoret were being improved alongside a railway from Eldoret to the port city of Mombasa