Petroleum products consumption rises in Kenya, globally

March 10, 2016
Shares
According to Petroleum Institute of East Africa Chairman Powell Maimba, this is attributed to the low petroleum prices worldwide/FILE
According to Petroleum Institute of East Africa Chairman Powell Maimba, this is attributed to the low petroleum prices worldwide/FILE

, NAIROBI, Kenya, Mar 10 – The global consumption of petroleum energy increased by 15 percent in 2015 compared to that of the previous year.

In Kenya in 2015, consumption of petroleum products increased to approximately 5,882 million cubic meters compared to 5,370 million cubic meters in 2014.

According to Petroleum Institute of East Africa Chairman Powell Maimba, this is attributed to the low petroleum prices worldwide.

The increase in demand necessitated by low oil prices has also contributed to increase in the tax that industry collects on behalf of Kenya Revenue Authority.

For instance, taxes collected last year amounted to Sh102 billion thereby contributing about 35 percent of the revenue from customs that were collected by the Authority.

Kenya was also one of the top four countries worldwide to have posted the lowest petroleum prices in the last one year.

“This was regardless of the fact that there was an increase in local taxes and levies as well as the widely acknowledged supply chain inadequacies,” Maimba added.

Kenya and the wider EAC also benefitted from the introduction of Low Sulphur Diesel (LSD), which has been available in the market since January 2015.

The East African region is also the only region in the developing world, that has shifted to cleaner fuels as a block using a uniform legislation in one go.

“Since January 2015, the sulphur content in diesel is now 50 parts per million, compared to between 500-700 parts per million previously. In fact, oil marketing companies are importing diesel with less sulphur content than the prescribed maximum,” he added.

Low sulphur diesel is full of benefits. For instance, it reduces corrosion in car cylinders and exhausts, leading to longer engine life and less frequent repairs or rebuilds hence increasing savings by motorists.

Kenya also had the highest drop in gasoline prices on the continent with a drop of -12 percent followed by Ivory Coast at -8.80 percent. Ghana on the other hand had the highest drop in diesel prices at -6.40 percent followed by Kenya at -1.80 percent and Ivory Coast at -1.70 percent.

“Very few countries in Africa were able to experience drop in prices with countries like Uganda having an increase of 1.40 percent in Gasoline and South Africa experiencing an increase of 3.90 percent in diesel.

The petroleum industry has however faced challenges which include the illicit trade in petroleum fuels, lubricants and LPG in Nakuru County.

According to Maimba, the trade has created an unleveled playing field in the market and exposed the county to fires and potential disasters.

Shares

Latest Articles

Stock Market

Most Viewed