The government yesterday hinted at the possible removal of Kenya Pipeline Company (KPC) from the
list of public firms to be sold via Nairobi Securities Exchange (NSE).
Energy and Petroleum Cabinet Secretary Opiyo Wandayi pointed at the continued profitability of the parastatal and its strategic importance to the country.
Wandayi also noted that KPC is a key player in the region’s petroleum logistics. KPC reported a Sh7.5 billion pre-tax profit in the financial period 2023/24, a 22.9 per cent increase from the previous period’s Sh6.1 billion.
Speaking during a tour of the facility, Wandayi said he had been assured by KPC management that the company is in line to increase the pre-tax profitability to Sh12.5 billion.
Wandayi said it must be understood that this organisation is at the heart of the country’s economic development and also at the heart of regional integration in this part of Africa.
“I must emphasise and actually clarify that Kenya Pipeline Company is not on the table in terms of any plans for privatisation,” he said during the tour.
The decision to keep KPC under government control comes amid criticism from various stakeholders who argue that privatisation could compromise the corporation’s vital role in ensuring fuel security in the region. Critics have argued that KPC’s stability and operational effectiveness are essential for maintaining a reliable fuel supply, which is crucial for both economic growth and national security.
Revenue streams
In addition to its core operations, KPC is embarking on various initiatives to diversify its revenue streams. This includes the rollout of a fibre optic network alongside its existing pipeline infrastructure. This network will extend from Mombasa to Nairobi and further to Nakuru, Eldoret, and Kisumu.
KPC plans to deploy single-mode fibre (SMF) cables, licensed by the Communications Authority of Kenya, to enhance internet connectivity, particularly in rural areas.
The corporation aims to charge $22 per kilometre for leasing the fbre, with installation fees of $200 per site.
This initiative not only promises to generate additional revenue but also contributes to bridging the digital divide in underserved regions. It is also collaborating with the Kenya Ports Authority (KPA) to facilitate the distribution of Liquefied Petroleum Gas (LPG) across the country.
The corporation has set an ambitious target to connect five million homes to subsidised LPG by 2027, making it more affordable for Kenyan households. To achieve this goal, KPC plans to establish storage
facilities in the hinterlands, enhancing accessibility and ensuring a consistent supply.
Furthermore, KPC aims to position the Kenya Petroleum Refinery Limited (KPRL) as a regional trading hub for LPG, serving up to 12 countries in East Africa.
Managing Director Joe Sang said that the State corporation will “sign a memorandum of understanding with Rwanda in the coming week” to facilitate the delivery of oil products to the landlocked nation.
Plans are underway to extend the pipeline from Eldoret to Kampala as part of the overall strategy to build
on the economies of scale.
In response to rising operational costs, KPC is making a strategic shift towards solar energy.
