Kenya: Govt Eyes Strategic Fuel Reserve to Cushion Supply Shocks

Nairobi — The government is engaging private sector investors to establish a contingency fuel storage facility in Mombasa, in a bid to strengthen energy security and cushion the country against global supply disruptions.

Energy Cabinet Secretary Opiyo Wandayi told the parliamentary Energy Committee that discussions are ongoing to set up a strategic petroleum reserve, noting that Kenya currently lacks a national fuel buffer system.

"We are yet to establish a fuel reserve. We are working closely with private sector players who want to partner with the government to set up a contingency storage facility in Mombasa," he said.

"As it stands, the country relies on fuel supplies as they come based on agreed import schedules."

The planned facility signals a shift toward building strategic petroleum reserves that would allow Kenya to hold buffer stocks and respond more effectively to global supply shocks.

According to the Kenya National Bureau of Statistics (KNBS), Kenya imported 5.2 million tonnes of petroleum products in 2024, up from 4.3 million tonnes in 2023, underscoring the country's heavy reliance on imports.

Most of the fuel is sourced through government-to-government deals, largely from the Middle East--leaving the country exposed to geopolitical risks and global price volatility.

The absence of a strategic fuel reserve has long been viewed as a key vulnerability, especially during periods of global instability and supply chain disruptions.

A storage facility in Mombasa--Kenya's main oil import hub--would enable the country to store fuel for emergency use, helping stabilize supply and ease domestic price pressures.

The Coast region already hosts key oil infrastructure, including import terminals and storage facilities, making it a natural location for expanded reserve capacity.

The move comes amid rising fuel demand, pressure on the shilling, and continued exposure to global oil market fluctuations driven by geopolitical tensions, reinforcing the urgency of building a more resilient energy supply system.

Read the original article on Capital FM.