Kenya: Govt in Talks to Build Fuel Buffer System Amid Global Oil Volatility

Nairobi — The government is in talks with private investors to establish a contingency fuel storage facility in Mombasa aimed at strengthening Kenya's energy security and shielding the country from global supply disruptions.

Energy Cabinet Secretary Opiyo Wandayi told the parliamentary Energy Committee that discussions are ongoing to develop 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," Wandayi said.

He added that Kenya currently relies on fuel imports based on scheduled deliveries, without any emergency stockpile.

The proposed facility would mark a major shift in Kenya's energy strategy by introducing buffer stocks that can be used during global supply shocks or geopolitical disruptions.

The move comes amid rising concerns over exposure to international oil price volatility and supply chain instability.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the country imported 5.2 million tonnes of petroleum products in 2024, up from 4.3 million tonnes in 2023.

Most of Kenya's fuel is sourced through government-to-government arrangements, largely from the Middle East, leaving the country vulnerable to global geopolitical tensions and price fluctuations.

The absence of a strategic petroleum reserve has long been identified as a structural weakness in Kenya's energy sector, particularly during periods of global instability.

A storage facility in Mombasa--already Kenya's primary oil import hub--would allow the country to hold emergency fuel stocks and stabilize supply during shortages.

The Coast region already hosts key oil infrastructure, including import terminals, storage depots, and distribution networks, making it a strategic location for expanded reserve capacity.

Officials say the initiative is also expected to enhance efficiency in fuel distribution and reduce vulnerability to external shocks.

The push for a fuel reserve comes at a time when Kenya is facing rising domestic fuel demand, pressure on the shilling, and continued exposure to global oil market volatility driven by geopolitical tensions.

Energy analysts say the project could significantly improve resilience in the country's fuel supply chain if successfully implemented.

Read the original article on Capital FM.