National Energy Policy - Final Draft - 14 Nov 2013

and averaging at more than US$110 per barrel most of the year. In 2012 the average pricewent up by 3.1% to US$112.97 per barrel. The rapid prices changes were mainly attributed tostrong global demand, appreciation of the dollar and the unrest in the Middle East and NorthAfrica. High international oil prices and a weak Kenyan Shilling have led to spikes in prices ofpetroleum products in the domestic market.2. The total quantity of petroleum products imported into the country grew by 11.5% from3,844,600 tonnes in 2010 to 4,285,700 tonnes in 2011 and declined by 3.3% to 4,142,500tonnes in 2012. During the same period, the total value of petroleum products exported,including re-exports, increased by 47.1% while the total import bill increased by 68.2% to KShs.337,749.2 million in 2011 and declined to KShs. 326,921.6 million in 2012. Total domesticdemand for petroleum products rose by 1.9% in 2011 and declined by 6.9% in 2012.2.2.4.1 Petroleum Infrastructure Issues1. Sufficient and efficient infrastructural systems are key to ensuring adequate, reliable and costeffective supply of petroleum products. The increase in local and regional demand forpetroleum products has not been matched by the development of the infrastructure to meetsupply chain and market requirements.2. In addition, the escalating international prices of petroleum products and the volatile foreignexchange rates have led to unpredictable consumer prices, more so in the local pump prices.From 2010 the resulting cost-push inflation has led to unsustainable increase in the cost ofliving.2.2.4.2 Import/Offloading Facilities in Mombasa1. Both refined petroleum products and crude oil are offloaded at the Kipevu Oil Terminal (KOT).The refined products are routed to the Kipevu Oil Storage Facility (KOSF) and crude oil toKenya Petroleum Refineries facilities in Mombasa. KOT handles over 90% of the country’simports, some of which are transit products for Uganda, Northern Tanzania, Rwanda, Burundi,Eastern DRC, and South Sudan.2. A smaller jetty at the Shimanzi Oil Terminal (SOT) is operated by the oil marketers for importand export of refined petroleum products. Products imported through SOT are evacuated byroad and rail.3. The long term plan of the Kenya Ports Authority is to cease using SOT for handling petroleumproducts and to relocate KOT to pave way for construction of a Container Terminal at Kipevu.2.2.4.3 Storage Facilities in Mombasa1. KOSF has a storage capacity of 326 million litres while its operational capacity is 269 millionlitres. This comprises 58, 108 and 103 million litres of petrol, diesel and dual-purpose kerosene,respectively. This capacity is not adequate for regional demand of petroleum productsestimated at 450 million litres per month.21 2.0 – FOSSIL FUELS