Fuel re-exports up on high regional demand

Kenya Pipeline Company Limited (KPC) Chairman John Ngumi during the line a signing ceremony at the company's offices in Industrial Area on July 15, 2015. Increased capacity for the KPC over the years had spurred re-exports' high margins. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • Official figures contained in the Economic Survey 2016 show Kenya has witnessed a consistent rise in re-exports over the last five years.
  • In 2014, the country made petroleum re-exports of 561,600 tonnes, amounting to Sh47.1 billion, compared to 111,100 tonnes made in 2013 representing traded products of Sh9.4 billion.

Petroleum re-exports from Kenya climbed 33.9 per cent last year to 752,000 tonnes, representing Sh52.9 billion worth of traded fuel exports compared to a year earlier, on the back of huge regional demand.

Official figures contained in the Economic Survey 2016 show Kenya has witnessed a consistent rise in re-exports over the last five years.

In 2014, the country made petroleum re-exports of 561,600 tonnes, amounting to Sh47.1 billion, compared to 111,100 tonnes made in 2013 representing traded products of Sh9.4 billion.

Meanwhile, in 2012, 55,300 tonnes of petroleum re-sales were made, representing Sh4.8 billion compared to 60,500 tonnes, which represented Sh4.8 billion in 2011.

Kenya is not a producer of petroleum products but has been importing them for re-sale to Uganda and the wider Great Lakes region.

Other key markets include South Sudan, Rwanda and the Democratic Republic of Congo.

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

Experts said a spike in regional demand powered by growth in various economies had fuelled the rise in re-exports.

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

Mr Kinyua said increased capacity for the Kenya Pipeline Company (KPC) over the years had also spurred the high margins.

“The petroleum supply has become more efficient and boosted the volumes. All these mean more growth in revenues for Kenya,” Mr Kinyua told the Nation.

Industry estimates show that more than 80 per cent of Uganda’s 715,000-tonne annual fuel consumption is shipped through Kenya — the bulk of it by the KPC.

Broadly, the quantity of total petroleum product exports increased by 24.3 per cent to 765,500 tonnes in 2015.

Re-exports constituted 98.3 per cent of the total volume of petroleum product exports during the period.

The value of total petroleum product exports, on the other hand, expanded by 12 per cent from Sh53.2 billion to Sh59.5 billion during the same period.

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