Market Trends of East Africa Refined Petroleum Products Industry
This section covers the major market trends shaping the East Africa Refined Petroleum Products Market according to our research experts:
Middle Distillates to Dominate the Market
Middle distillate refers to refined oil products between lighter fuel like gasoline and heavier fuels like fuel oil. It mainly comprises jet fuel, kerosene, diesel, and others.
Kenya witnessed an increase in the consumption of refined products in 2020. Light diesel oil and gasoline led the market with daily consumption at 2,157.6 thousand metric ton and 1395.3 thousand metric ton, respectively.
Additionally, front-end engineering and design (FEED) work on the Ugandan refinery has been completed, with a final investment decision (FID) to be made in August 2022. The refinery is expected to be operational by 2023, significantly driving the refined products market.
With growing demand in the transportation and power generation sectors, among others, the demand for middle distillates is expected to grow further and dominate the market in the forecast period.
Kenya to Dominate the Market
According to the International Energy Agency, the demand for gas consumption is expected to grow significantly in Kenya in the future, owing to both overall African and Kenyan ongoing policy scenarios.
The construction of new oil terminals and refineries in the country will also support the growth of refined petroleum products. For instance, the new Kipevu Oil Terminal in Mombasa, Kenya, is due to start operations in January 2022 and will see Kenya double its handling capacity to transport petroleum products to Uganda, Burundi, and Rwanda from the current 35,000 ton. The terminal is expected to drive the growth in the market significantly.
The primary energy consumption by Kenya of oil is expected to reach more than 13 megaton of oil equivalent (Mtoe) by 2040, creating significant demand for refined petroleum products as well.
In December 2021, Kenya Pipeline Company KPC and Kenya's Ministry of Energy announced plans to set up a dedicated LPG storage facility with a capacity of around 25,000 ton, which is expected to have a positive impact on the market studied.
With increases in population and demand for refined petroleum products from end-user industries like automotive and petrochemical industries, the refined petroleum products market in Kenya is expected to dominate the market over the forecast period.
