Kenyatta says Kipevu oil terminal to stabilise petroleum costs in Kenya

NAIROBI, Kenya Jan 6-President Uhuru Kenyatta has said the newly launched Sh40 billion offshore Kipevu Oil terminal will enhance the supply and cost stability of petroleum products in Kenya and the region.

Speaking at the end of an inspection tour of the mega project, the President who was accompanied by Chinese foreign minister Wang Yi, said that the terminal will result in saving Sh2billion that is currently paid in demurrage costs occasioned by long queues of vessels parked outside the harbor waiting to discharge their product.

“With the completion of this project, those delays will be a thing of the past and those benefits will directly relate to the pockets of our people,” said Kenyatta.

Demurrage is a charge payable to the owner of a chartered ship on failure to load or discharge the ship within the agreed time.

In a report to the National Assembly following a probe into the high cost of fuel, the Finance and National Planning Committee said different vessel owners were paid Sh1.3 billion in demurrage charges between January and August 2021.

The Committee has proposed the capping of the number of days within which shipping vessels offloading fuel must be discharged to address the spiraling demurrage charges which partly contribute to the high cost of fuel.

The Kenya Pipeline Company (KPC) which will operate the country’s biggest oil tankers’ berthing facility, is expected to use its expertise in large fuel handling to bring the facility to full speed, with the increased capacity expected to save importers from demurrage and surcharges, hence a possible drop in the cost of importing fuel products and the final pump prices.

With speedy cargo evacuation, the country will save on demurrage costs to the tune of Sh0.50 per litre per month for each of the three price regulated petroleum products–petrol, diesel and kerosene.

Currently, a litre of petrol and diesel retail at  Sh129.72 and Sh110.60 respectively in while a litre of kerosene retails at Sh103.54.

The Kipevu Oil terminal consists of one offshore island terminal with four berths whose total length is 770m.

The oil terminal also consists of a workboat wharf at the Westmont area for landing facilities.

The President who was accompanied on the tour by visiting Chinese Foreign Affairs Minister Wang Yi, thanked China for continuing to open up its expansive market to Kenyan exports.

the President hailed Kenya’s partnership with China saying the arrangement had helped deliver key development projects including the offshore jetty, the Standard Gauge Railway (SGR) among others.