MOMBASA

The Kenya Pipeline Company (KPC) has announced plans to build another petroleum products pipeline between Mombasa and Nairobi, barely four years after the commissioning of the line that currently moves fuel between the two cities.

The company says growing demand for petroleum products in Kenya and the region is causing a strain on the pipeline that started operations in 2018 and necessitating more investments including the construction of another line and increasing capacity at its inland depots.

KPC said other than growing demand, there is also an increase in petroleum product flow rate from ships importing fuel to Kenya following the commissioning of the second Kipevu Oil Terminal (KOT) in August.

That plan is among the reasons the company has asked for an increase in the tariff that oil marketing companies pay to use its pipelines and depots to move and store petroleum products.

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KPC has made an application to the Energy and Petroleum Regulatory Authority (EPRA) for a 13% increase on its transport and storage tariff to KES 5.22 per cubic meter per kilometer over the 2022-23 financial year from the current KES 4.61.

The tariff will increase to KES 5.53 per cubic metre per kilometre in the 2023-24 financial year but ease slightly during the 2024-25 financial year to KES 5.50 when the company expects to have completed building the pipeline.

The money accruing from the higher tariff is also expected to enable KPC to increase its storage capacity at its depots in the Western Kenya region.

If Epra approves the tariff application as proposed, it will have the effect of increasing the retail cost of super petrol by 54 cents in Nairobi, 42 cents per litre in Nakuru and 29 cents per litre Eldoret and Kisumu.

The recently built Mombasa-Nairobi pipeline (Line 5) cost KES 48 billion and started operations in 2018. It currently pumps about a million liters of fuel per hour but has the capacity to increase this to 1.8 million liters per hour.

SOURCE: The Kenya wall street

Tea prices at the Mombasa auction below the set minimum price as demand remains subdued at the weekly trading with the onset of summer in key export markets.

The price of the beverage in last week’s trading increased marginally to $2.29 (Sh268) from $2.23 (Sh261) in the previous sale, well below the government set reserve cost of $2.43 a kilo.

The minimum price which only applies to tea from Kenya Tea Development Agency (KTDA) has seen traders opt for cheaper options from other regional countries, giving a wide berth to expensive Kenyan beverages.

KTDA accounts for more than 70 per cent of the beverage traded at the auction.

Consequently, demand for the beverage in the world market has declined due to the onset of summer in major buying countries, reducing the consumption of the beverage forcing traders to go for cheaper commodities.

“The demand is now shifting towards cheaper beverages that is why non-Kenyan teas and plantations are now selling well compared with KTDA teas,” Peter Kimanga, a director with Global Teas.

The value of the commodity has sold below the minimum price for the last 14 weeks, which is expected to negatively impact farmers’ earnings at the end of this financial year.

Export earnings from the beverage in the 12-months to April 2022 rose to $1.22 billion (Sh142.4 billion) from $1.2 billion (Sh140 billion) in the corresponding period in 2021, Central Bank of Kenya data shows, helped by higher volumes and weaker shilling.

Source: The Kenyan wall street

KPC set to Build a new petroleum products pipeline Between Nairobi and Mombasa

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Tea Prices Fall Short of Sell Reserve Price at Mombasa Auction