Moving refinery to Uganda will cost Kenya a lot

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Kenya’s President Uhuru Kenyatta

10 October 2013, Nairobi – On August 28, President Uhuru Kenyatta was a signatory to a joint communiqué between Ugandan President Yoweri Museveni and Rwanda’s Paul Kagame and representatives of the Presidents of Southern Sudan and Burundi that among other things confirmed Kenya’s participation in the development of a refinery in Uganda by October 15, 2015.

This is indeed good progress for the East African Community. It is important to note that there was no mention of the Mombasa refinery, which has served Kenya for the last 50 years operating on the initial technology of 1963/1974.

It is a fact that for industries to survive the test of time, there has to be consistent investment in improved research and technology. This is evident in the automobile industry; there has been continuous investment in modern technology, current automobiles being produced meet the current legislation, environmental or other legal requirements that come to the fore.

This approach of investing in modern technology should also be applied to the Kenyan refinery if it is to remain efficient and benefit the region and play its role as a strategic facility.

The refinery in Uganda is expected to refine 30,000 barrels of crude oil per day while the Changamwe facility running on both plants at medium throughput produces 49,000 barrels per day.

It is my opinion that the capacity of the Ugandan refinery will not be sufficient to meet the ever increasing fuel demand that comes with improved living standards in the region. The upgrade of the refinery is expected to cost $1.2 billion while the Ugandan refinery construction may cost about $7 billion.

What will Kenya lose should the refinery be moved from Kenya to Uganda?

A source of direct and indirect employment to Kenyan citizens at various levels – skilled and manual jobs that creates stability for its citizens.

The presence of a refinery always has supporting industries that aid in its operations, absence of a local refinery has a negative impact on the supporting industries and their employees.

Source of income to other government departments such as water, power and Kenya Revenue Authority.

Continuity in the education system. It has been a destination for educational trips, offered industrial attachment to students and employed others from various institutions.

Loss of specialised technical skills and a probable brain drain to other countries.

Heavy reliance on direct imports leaves the importer at the mercy of the supplier.

With this in mind, is it possible for the government to review the existence of the refinery and invest in upgrading its own refinery? Stella Opakas is an Energy Optimisation Technologist at KPRL. The views expressed here are her own and do not reflect the organisation’s.

– The Star

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