New oil terminal to cut fuel prices, Uhuru says

Thursday, January 6th, 2022 11:30 | By
President Uhuru Kenyatta with visiting State Counsellor and Minister for Foreign Affairs of China Wang Yi during an inspection tour of the ongoing construction of the new offshore Kipevu Oil Terminal at the Port of Mombasa. Photo/PD/Ndegwa Gathungu

Harrison Kivisu and PSCU

President Uhuru Kenyatta has hinted that the cost of fuel will reduce drastically after the completion of Sh40 billion Kipevu Oil Terminal in March.

Upon completion, the country will double the capacity of handling transit petroleum products starting March, from the current 35,000 tonnes.

This will ease the cost of living considering that fuel is a key driver of the economy.

Speaking during an inspection tour in Mombasa yesterday accompanied by a Chinese State Counsellor and Minister of Foreign Affairs Wang Yi, the president said the multi-billion shillings project will ensure that Kenyans get relief from low fuel prices as a result of adequate supply.

“This project will ensure adequate supply of fuel in the country, and by this, therefore, Kenyans will see a reduction of cost of fuel,” Uhuru said. 

Last year, the president also set up a task force to cut the cost of power which according to Kenya Power will see the cost of electricity crop by 15 per cent in customers’ January bills.

“The reduction of the cost of electricity will be implemented in two tranches of 15 per cent each; with the first 15 per cent, which will be achieved through initial actions focusing on system and commercial losses being reflected in the December bills, and a further 15 per cent reduction in the first quarter of 2022,” said Kenya Power in a statement.

President Kenyatta said the multi-billion project which will be complete by March this year consists of one offshore island terminal with four berths whose total length is 770 metres and one work boat wharf at the Westmont area for landing.

“This project is expected to fully get operational by March this year, the project is significant in the sense that it will sufficiently serve the East African region,” said the President.

The facility comes with five sub-sea pipelines, which were buried 26 metres under the seabed to allow for future dredging of the channel without interfering with the pipes.

Very large vessels

The 770m jetty which was fully funded by the Kenya Ports Authority (KPA) is the largest of its kind in Africa, with a capacity to load and offload very large vessels of up to 200,000 DWT carrying all categories of petroleum products including crude oil, white oils and LPG.

Speaking at the Kenya Ports Authority (KPA) after inspecting progress, Uhuru said the new offshore Kipevu Oil Terminal which is currently 96 per cent complete will not only enhance supply and cost stability of petroleum products in Kenya but also in the region.

“This project is a game-changer because it will help the country salvage Sh2 billion lost from demurrage, due to long queues of vessels waiting to dock, but now the new terminal can accommodate more than two vessels at a go,” the Head of State said.

Treasury Cabinet Secretary Ukur Yatani warned that the country has been losing a lot of revenue from the delays terming the new terminal a relief to many players and Kenyans at large. 

Uhuru  hailed Kenya’s partnership with China, saying Kenya will continue to partner with like-minded countries like China for development. 

“We do not need lectures on what we need, we work with those who need us,” he said. 

The new oil terminal, is financed by KPA and constructed by China Communication Construction Company, and can handle up to four vessels compared to the existing one that handles one vessel at a time. 

The President identified Dongo Kundu road project and expansion of the Malindi-Mtwpa highway as major infrastructure projects the government is undertaking at the coast.

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