The agency charged with stabilising retail prices for petroleum products has invited experts to lay the groundwork for a national petroleum reserve to stem supply disruptions and cushion Kenyans against global price swings.
The National Oil Corporation of Kenya ( Nock) on Friday invited firms to assess the viability of setting up the reserve and the supporting infrastructure that would be needed.
“The consultant is expected to consider the need to invest in infrastructure for holding strategic stocks and easing the constraints within the existing petroleum distribution,” said the Expression of Interest.
Although Nock was given the mandate in 2008 to create specific reserves, the contingency plan encountered challenges in raising the Sh115 billion required to have three months worth of national consumption in stock. The matter cooled off with the fall in international fuel prices from the 2008 highs but has attracted renewed interest as rising crude prices once again threaten to fuel economic disruption and social unrest.
“The strategic stocks are essential in shielding the country against any supply disruptions including rapidly escalating prices,” Energy minister Kiraitu Murungi told stakeholders at a workshop on Friday.
A public private partnership, ministry officials said, was the best option to overcome financing hurdles.
Limited storage in the national pipeline system recently forced the government to suspend a 30 per cent procurement quota granted to Nock for crude oil and refined products.