The government has unveiled a plan to shield the market from a hike in oil prices by upgrading the 30-day petroleum strategic oil reserve to a 90-day consumption.
Principal Secretary state department of Petroleum Andrew Kamau told the National Assembly’s Departmental Committee on Energy that the move would be an expensive exercise given the prevailing circumstances in the country.
“As for petroleum reserves, we need 90 days storage. Kenya needs 140,000 barrels per day. If you calculate 140,000 by 90 by Ksh 6,500, you are at Ksh 82.3 billion required to be appropriated by Parliament for these projects. That is one Eurobond."
"I don’t think given the circumstances that are there in this country right now, that is something that is a priority,” he stated
According to PS Kamau, Kenyans consume 468 million liters of petroleum products in a month, out of which Super accounts for 160 million, Diesel 220 million liters, Jet Fuel 75 million liters, and illuminating kerosene 13 million liters.
The government is setting up the Consolidated Petroleum Fund which will channel funds from budget appropriations, petroleum sector players, government securities and corporate bonds, recovered assets from proceeds of crime in the sector, grants, gifts, and donations as well as monetary sanctions imposed by Energy, Petroleum and Regulatory Authority (EPRA).
CPF which is meant to cushion Kenyans against hiked prices will be under the Petroleum (Strategic Stocks) Regulations, 2020 that was drafted by EPRA and is currently undergoing public participation.
"The regulations have provided the framework for procurement, management, drawdown, and replacement of Petroleum Strategic Stocks. They have also provided for the identification and declaration of the Petroleum Strategic Stocks storage facilities,” he added.
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