By Benadeta Mwaura - Reporter
Kenya, August 17, 2026 - Kenya's Senate has given the Ministry of Energy and Petroleum 12 months to develop a framework for establishing a national strategic oil reserve capable of holding at least six months of the country's fuel consumption.
The proposal is aimed at reducing Kenya's vulnerability to disruptions in the international oil market after instability in the Middle East exposed the country's dependence on uninterrupted imports.
The Senate Standing Committee on Energy wants the framework developed jointly by the Energy Ministry, the National Treasury and other relevant agencies, with the National Oil Corporation of Kenya (NOCK) taking the lead in establishing and managing the reserve.
The committee's recommendations are contained in a report examining alleged irregularities in Kenya's fuel supply chain that emerged during the disruptions to global energy supplies in March.
Under the proposed framework, the government would have to determine how the reserve will be financed, where the fuel will be stored, how stocks will be rotated and what governance and accountability mechanisms will oversee the system.
The proposal marks a significant shift in Kenya's approach to fuel security.
Instead of relying primarily on regular import schedules and commercial stocks held by oil marketers, the government would maintain a dedicated national buffer that could be released when international supply chains are disrupted.
The Senate proposal comes after the Energy Ministry acknowledged earlier this year that Kenya does not yet have a national strategic fuel reserve.
In April, Energy Cabinet Secretary Opiyo Wandayi told a parliamentary committee that the government was working with private-sector players on establishing a contingency storage facility in Mombasa.
At the time, he said Kenya continued to rely on fuel arriving according to agreed import schedules.
That arrangement can work when global supply chains are functioning normally.
The problem becomes apparent when shipping routes are disrupted, oil prices surge or geopolitical tensions interfere with supplies.
Kenya imports virtually all of its refined petroleum products, making the country particularly exposed to events occurring thousands of kilometres away from its borders.
The disruptions experienced earlier this year demonstrated how quickly an international energy crisis can become a domestic economic problem.
Higher international oil prices can feed directly into the monthly fuel-price review and subsequently increase transport costs, electricity generation costs and the cost of moving food and other goods around the country.
A prolonged interruption in physical supplies could create an even more serious problem.
The Senate committee wants the government to go beyond simply constructing storage facilities.
It is calling for the restructuring and recapitalisation of NOCK, giving the corporation a stronger role as Kenya's strategic petroleum entity.
Under the proposal, NOCK would acquire, manage and maintain the strategic petroleum reserves.
The corporation could also develop and operate storage facilities either directly or through public-private partnerships.
The committee argues that strengthening NOCK would give the government an institution capable of responding directly to national energy-security requirements rather than leaving strategic decisions entirely to commercial oil companies.
The proposed model would require significant investment.
A six-month reserve would involve not only purchasing large volumes of fuel but also constructing or expanding storage infrastructure, maintaining the stock, rotating products to prevent deterioration and financing replacement stocks as fuel is released.
The financing model will therefore be one of the most important issues the government must resolve during the 12-month framework-development period.
The senators have also proposed using the planned Dangote refinery facility in Mombasa as part of the country's broader strategy for increasing petroleum storage capacity.
The committee believes the facility could help strengthen Kenya's strategic reserves while also improving the reliability of fuel supplies to the wider region.
The proposal is significant because Mombasa already serves as the country's main gateway for imported petroleum products.
Expanding storage capacity around the port could allow Kenya to hold larger stocks closer to the country's main import infrastructure, reducing the pressure created when shipments are delayed.
It could also potentially strengthen Kenya's position as a regional fuel-supply hub.
The proposed six-month reserve would represent a substantial increase in Kenya's ability to withstand an external supply shock.
A strategic reserve is not intended to replace normal fuel imports.
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Instead, it acts as an emergency buffer.
During normal periods, fuel continues to enter the country through the ordinary supply chain. Stocks in the strategic reserve are periodically rotated so that they remain usable.
If imports are disrupted, the government can release part of the reserve into the market while alternative supplies are arranged.
That gives policymakers additional time to respond rather than being forced to react immediately to a shortage.
The principle has become particularly relevant after the global energy disruptions seen this year.
For Kenya, a prolonged crisis could affect far more than motorists.
Fuel prices influence public transport fares, freight charges, agricultural production, manufacturing, aviation and the cost of moving essential goods.
A shortage or sharp increase in fuel prices can therefore quickly spread through the wider economy.
While the proposal could strengthen Kenya's energy security, establishing a six-month reserve will not be cheap.
The government will need to determine whether the reserve will be financed directly through the national budget, through a petroleum levy, by NOCK, through public-private partnerships or through a combination of different financing mechanisms.
The Senate committee has specifically asked the proposed framework to address financing, stock rotation, governance and accountability.
That requirement is important because maintaining a strategic reserve involves costs even when there is no crisis.
Fuel must be stored, monitored, insured and periodically replaced.
There will also need to be clear rules on when the reserve can be released, who authorises its use and how it is replenished after an emergency.
Without those safeguards, a strategic reserve could become vulnerable to mismanagement or political interference.
The Senate's recommendation comes as Kenya continues to confront the consequences of its dependence on imported petroleum.
The country has already experienced the effect of global oil-price movements on domestic pump prices.
When international prices rise, Kenyan consumers ultimately feel the impact through the Energy and Petroleum Regulatory Authority's monthly price reviews.
A strategic reserve would not necessarily prevent prices from rising when global oil prices increase.
What it could do is give Kenya greater protection against physical supply disruptions and temporary external shocks.
That distinction is important.
A reserve cannot make expensive oil cheap.
It can, however, give the country more time to find alternative supplies when normal imports are disrupted.
For a country whose economy depends heavily on road transport and imported petroleum products, that additional resilience could be significant.
The Senate has now given the Energy Ministry one year to develop the framework.
The next stage will be determining exactly how much storage Kenya needs, where the facilities will be located, how the reserve will be financed and how NOCK will be equipped to manage it.
The proposal therefore moves the debate beyond whether Kenya needs a strategic fuel reserve to the more difficult question of how the country can afford and govern one.
For now, the Senate's message is clear: Kenya cannot afford to remain exposed to every major disruption in the global oil market without its own national fuel buffer.