Extractive and Energy

Kenya’s half year petroleum sales record 7% growth – PIEA

Crude oil averaged at $ 50.75per barrel in 2017. The average price for LPG for Q2 2017 was Ksh150 Ksh per Kilogramme.

Kenya’s petroleum sales increased by seven per cent in half year 2017 to close at 3.14 million cubic metres, compared to 2.92 million cubic metres sold in the same period 2016, latest industry data show.

This is as a result of increase in demand for Premium Motor Spirit (Pms), industrial diesel, fuel oil and Liquefied Petroleum Gas, the Petroleum Institute of East Africa has reported.

PIEA 2017 quarter three reports released on Friday indicate sales on premium gasoline (petrol) increased by six per cent to close at 836,411 cubic metres, compared to 787,901 cubic metres.

Kerosine, mainly used for cooking and lighting by poor households, sold 286,093 cubic metres compared to 269, 062 cubic metres sold in a similar period last year, a six per cent increase.

However sales for diesel, mainly used in transportation, farming and manufacturing, declined by one per cent where sales for quarter two closed at 1.240 million cubic metres, compared to 1.247 million cubic metres in 2016.

Jet A 1 sales (used in aviation industry) also dropped by six per cent to close at 389,138 cubic metres, compared to 413,555 cubic metres in a similar period last year.

This reflects reduced activities in the aviation industry this year compared to last year, where Kenya hosted a number of key international conferences.

LPG sales however increased by 53 per cent to sale 34,563 cubic metres in the six months to June, compared to 22,608 cubic metres last year.

“Retail outlets still remains the highest contributor of sales at 42.70 per cent for the industry,” PIEA chairman Powel Maimba said.

Kenol Kobil had the overall largest market share including export between April and June with a 17.7 per cent stake. Vivo energy was second with 15 per cent while Total closed the top three with 12.8 per cent.

On consumption, retail outlets took the largest share of 42.7 per cent followed by resellers who took up 21.80 per cent of total sales.

The civil aviation industry consumed 13.1 per cent, manufacturing (7%), transport and communication (3.2 per cent) while the energy production consumed a paltry one per cent.

The Kenya government, military and the tourism sector consumed 0.5 per cent, 0.2 per cent and 0.1 per cent respectively.

“Petrol pump prices were generally high in 2017 compared to same period in 2016 and 2015,” PIEA said in the report.

According to the institute, diesel pump price average in quarter two was Ksh 87.85 per litre compared to Ksh70.10 in 2016, while that of petrol was Ksh 98.7 compared to Ksh 83.7 same period last year.

The average exchange rate for a dollar to Kenya shillings in Q2 2017 was Ksh103.20 to a dollar.

Crude oil averaged at $ 50.75per barrel in 2017. The average price for LPG for Q2 2017 was Ksh150 Ksh per Kilogramme.

Meanwhile, PIEA has called for regulations that incentivize investment in the country, which will among others, provide opportunities for employment and entrepreneurship which are key for economic development.

The institute has backed an ongoing government study on the petroleum industry, the first comprehensive review process that has been undertaken since 2008, when the formulae that regulates the retail prices was enforced.

“As the ERC continues to review the study and to listen to stakeholders’ feedback, the Industry recommends, as we have already done, that the review of the formulae structure be guided by two significant ideologies that are applicable to all other business sectors. These are considerations for a return on investment and the full recovery of costs for the investor,” Maimba said.

By Martin Mwita

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