Economy
Western pipeline volumes up 31pc after tariff slash
Monday, December 9, 2019 22:00
By JOHN MUTUA
Petroleum volumes loaded via Western Kenya pipeline depots jumped 31 percent to 183.4 million cubic meters in three weeks to December 2 compared to a similar period last year after reduction of tariffs, fresh data shows.
The Energy and Petroleum Regulatory Authority (EPRA) in a report tabled before the Senate shows that oil transporters are reverting to the pipeline.
In the period November 15-December 2 last year, they had loaded 139.7 million cubic meters.
EPRA cut tariffs for fuel transported through the Kenya Pipeline Company (KPC) network to Sh3,089 ($30.89) per 1,000 litres from Sh6,000 effective November 15 in an effort to win back oil transporters who had opted for Dar es Salaam.
EPRA Director-General Pavel Oimeke said the revision was necessary since Kenya was losing the Rwandan and Ugandan petroleum export markets to Dar es Salaam due to the high pipeline tariff.
The western depots in Eldoret, Nakuru and Kisumu are largely used to load oil products headed to Uganda, Rwanda, Democratic Republic of Congo (DRC) and northern Tanzania, in addition to the domestic market.
“With implementation of the new tariffs, throughput volumes in Western Kenya KPC depots have significantly increased,” EPRA says in the report tabled before Senate.
The increase will likely boost Kenya’s petroleum exports that dropped 43 percent from Sh2.1 billion in the first six months of 2018 to Sh1.2 billion in the first half of 2019.
The data shows that the KPC depot in Nakuru had the highest growth in fuel throughput at 48 percent to 39.3 million cubic meters in three weeks to December 2 from similar period last year.
The volumeof oil transported through the pipeline at Eldoret depot stood at 84.2 million cubic meters, reflecting a rise of 47 percent from similar period last year.
The Kisumu depot had the lowest growth at eight percent to hit 59.9 million cubic meters in the period under review from similar period last year.
The tariffs will further fall to Sh3,065 ($30.65) in 2020 and Sh2,907 ($29.07) in 2021.
KPC has protested the new tariffs saying they will hurt its revenue.
The parastatal said that Kenya has not been losing the export market for fuel but has lost the lubricating oils and grease market, which it does not handle.
