National Energy Policy - Final Draft - 14 Nov 2013

2.2.2 Petroleum Demand and Consumption1. According to the Economic Survey 2013, consumption of petroleum fuels in Kenya rose from3.1 million Tons of Oil Equivalent (TOE) in 2007 to 3.9 million TOE in 2011 and fell to 3.6 millionTOE in 2012. This is equivalent to a per capita consumption of 94.4 kilograms, which is still lowcompared to the standards of developing economies, and is attributable to low economic growthand over dependence on rain-fed agriculture.2. The Survey further indicates that retail pump outlets and road transport accounted forapproximately 79.7% of petroleum consumption, industrial and commercial sectors accountedfor 11.4% while power generation accounted for 8%.3. A study by the Kenya Institute of Public Policy Research and Analysis (KIPPRA) of August2010, estimated that unconstrained demand of Liquefied Petroleum Gas (LPG) was projected tobe over 300,000 metric tonnes in 2012. Suppressed LPG consumption in 2007 was more than75,000 metric tonnes, while the refinery production was about 35,000 metric tonnes.4. The average consumption ofpetroleum products in Kenya hasbeen increasing over the years.In 2004, actual consumption was2.9 million TOE, rising to 3.6million TOE in 2009 and 3.77million TOE in 2010. Some ofthe factors that explain thisvariation in consumption includeGDP growth, electrical energydemand, population growth,urban population growth, andincrease in motorization and airtransport.5. Demand for petroleum products(in m 3 ) is projected to rise by3.1% on average per annum from2009 to 2030. The projectionsunder different scenarios aregiven in Figure 2.2.Fig 2.2 National Demand Forecast for petroleum productsDemand (m 3 )12,000,00010,000,0008,000,0006,000,0004,000,0002,000,00002009201020112012201320142015201620172018201920202021202220232024202520262027202820292030YearOPTIMISTICConstrainedOPTIMISTICUnconstrainedBUSINESS ASUSUALConstrainedBUSINESS ASUSUALUnconstrainedPESSIMISTICConstrainedPESSIMISTICUnconstrained2.2.4 Petroleum Supply and Distribution1. The world economy emerged from the recession experienced in 2009 recording a significantgrowth of 4.6% in 2010. This influenced world oil demand and supply. In 2011 oil pricesfluctuated rapidly with the lowest at US$ 95.6 in January, peaking in April at US$ 120 per barrel20 NATIONAL ENERGY POLICY FINAL DRAFT NOVEMBER 2013