Rwanda is set to significantly increase imports of refined petroleum products through Kenya following the signing of agreements covering the transport and storage of fuel through the Northern Corridor.
Kenya and Rwanda had signed three agreements covering government cooperation and the transport and storage of bulk petroleum products through Kenya, KPC said. The agreements give Rwanda access to KPC infrastructure for the importation, transportation and storage of fuel through the Port of Mombasa and Kenya's pipeline network. The first shipment under the arrangement is expected to arrive at Mombasa between September 4 and 6, according to KPC.
Rwanda-bound fuel volumes through the Northern Corridor could rise from about 42 000 cubic metres in 2025 to more than 500 000 cubic metres a year, according to EBC Financial Group. The increase could strengthen Mombasa's position as a regional fuel gateway and expand Kenya's role in the movement of petroleum products to neighbouring countries.
Volumes put logistics in focus
The planned increase in transit volumes would place greater importance on the coordination of storage access, pipeline scheduling, customs procedures and inland transport, EBC Financial Group senior market analyst David Precious said.
“This may be an opportunity for Kenya to grow its regional fuel role, but the fuel shortages that happened in April are a reminder that supply reliability should not be measured only by national stock levels.
“Based on the Rwanda target, the concern is timed access, not headline capacity. Storage space, pipeline slots, documentation and truck release need to move in sequence.”
He said delays could increase financing costs for importers and lead to longer waiting times for local distributors.
KPC operates 1 342 kilometres of pipeline infrastructure and has capacity to handle about 14 billion litres of petroleum products annually, while its total storage capacity stands at more than 1.1 million cubic metres, according to EBC.
Uganda already imports about 95% of its petroleum products through Kenya via the Port of Mombasa and KPC's pipeline system, according to the Uganda National Oil Company.
Corridor reliability critical
Precious said Rwanda's increased use of the Mombasa route would place greater emphasis on the reliability of the corridor as transit volumes increased.
“The bigger worry is not one late shipment. It is a repeated pattern where waiting time turns into financing cost,” he said.
“Mombasa's regional role may depend on whether the corridor is predictable for both transit fuel and local supply.”
