Kenya’s Oil Industry Explained: Production, Imports, Refineries and Fuel Distribution

Kenya’s oil industry is built around a striking contradiction: the country has discovered commercial crude oil, but its domestic fuel market still depends overwhelmingly on imported refined petroleum products. Kenya’s South Lokichar development in Turkana is targeting first oil in December 2026 at an initial 20,000 barrels per day, while the country’s existing refinery at Mombasa has been inactive since 2013. In the meantime, imported petrol, diesel, jet fuel and other products enter mainly through Mombasa and move inland through a national pipeline, storage and retail network.

That makes Kenya’s petroleum sector less a story of simply “producing oil” than of connecting several different businesses: upstream exploration and crude production, maritime imports, storage, refining, pipeline transportation, wholesale marketing and retail distribution. The proposed $16 billion Dangote refinery in Lamu could eventually change that structure by adding large-scale domestic refining capacity, but it will not eliminate Kenya’s exposure to international oil markets overnight. The country would still need crude supply, transport infrastructure, financing and reliable distribution to turn a refinery into genuine energy security.

Kenya’s oil industry at a glance

Sources: EPRA, Kenya Pipeline Company, Kenya State Department for Petroleum and Reuters.

The simplest way to understand Kenya’s oil industry

Kenya’s petroleum supply chain can be divided into three broad stages.

1. Upstream: finding and producing crude

This includes exploration, drilling and production.

Kenya has discovered oil resources, particularly in Turkana’s South Lokichar Basin, but commercial-scale production has taken years to develop.

2. Midstream: moving and storing petroleum

This includes ports, pipelines, storage terminals and other infrastructure.

For Kenya, this is currently one of the most important parts of the industry because imported fuel has to move from the coast to inland markets.

3. Downstream: selling fuel

This covers wholesale distribution, oil marketing companies, filling stations and ultimately consumers.

Petrol, diesel, jet fuel, kerosene, LPG and other petroleum products reach customers through this downstream network.

This distinction matters because having oil underground does not mean having petrol at the pump.

A country can possess crude reserves while still importing virtually all of its finished fuel.

Does Kenya produce oil?

Yes—but commercial production has not yet reached the scale that would transform the country’s fuel supply.

Kenya’s major development project is the South Lokichar oil field development in Turkana County.

The government’s current plan calls for an initial production phase of 20,000 barrels per day, with first oil targeted for December 2026. A later phase is intended to increase production to 50,000 barrels per day from 2032, subject to development of the required infrastructure.

The first phase is particularly important because it would move Kenya from a country with discovered commercial oil resources to one actually producing crude on a sustained basis.

But even 20,000 barrels per day needs context.

It is tiny compared with the proposed 700,000-barrel-per-day capacity of the planned Lamu refinery.

That difference is one reason Kenya cannot assume that domestic crude production alone will supply a future large refinery.

Where is Kenya’s oil produced?

The most important development is in South Lokichar Basin, Turkana County, in northern Kenya.

The government says the approved development plan covers six fields in the basin under a phased development strategy using shared infrastructure.

The oil industry has therefore created a new economic geography in northern Kenya.

Instead of petroleum activity being concentrated around Mombasa and Nairobi, upstream operations are increasingly connected to Turkana, while midstream infrastructure must link those fields to the coast.

That creates a supply chain stretching across much of the country:

Turkana oil fields → transport infrastructure → coastal storage/export facilities → international market

What happens to Kenya’s crude oil?

Kenya’s domestic crude is not automatically turned into petrol inside the country.

The government’s current South Lokichar plan envisages crude being transported to Kenya Petroleum Refineries Limited (KPRL) in Mombasa for storage before export during the initial phase.

That is an important distinction.

Kenya can produce crude while still importing refined products because crude oil and finished petroleum products serve different stages of the supply chain.

A refinery is required to transform crude into products such as:

• Petrol
• Diesel
• Jet fuel
• Kerosene
• Fuel oil
• Other petroleum products

Without adequate refining capacity, crude can be exported while finished fuels are imported.

Why Kenya imports so much refined fuel

The main reason is simple: Kenya’s domestic refinery is not currently processing crude.

KPRL’s refinery in Mombasa was shut down in September 2013. Kenya Pipeline Company says the refinery has remained idle and that KPRL now operates primarily as a storage facility.

That fundamentally changed Kenya’s petroleum supply model.

Instead of importing crude, refining it domestically and distributing the resulting products, Kenya increasingly imports finished petroleum products.

Kenya’s 2024 petroleum trade data illustrate the scale. The Kenya National Bureau of Statistics recorded about 5.23 million tonnes of imported petroleum fuels in 2024, valued at roughly KSh573.3 billion.

The figure covers petroleum fuels rather than crude oil alone, which is why it should not be interpreted as the total value of every petroleum-related import.

Mombasa is the gateway

For Kenya’s petroleum system, the coast is the starting point.

Large petroleum tankers deliver products to facilities around Mombasa.

EPRA identifies several petroleum receiving and handling facilities, including Kipevu Oil Terminal, Shimanzi Oil Terminal, Mbaraki and other specialised facilities.

The basic chain looks like this:

International tanker → Mombasa terminal → storage → pipeline → inland depot → oil marketing company → filling station → consumer

This explains why events at Mombasa’s port can affect fuel availability and logistics across the country.

It also explains why coastal petroleum infrastructure is strategically important even though most consumers live hundreds of kilometres inland.

How Kenya’s fuel moves inland

The Kenya Pipeline Company (KPC) operates the backbone of the country’s petroleum distribution system.

KPC says its current network contains approximately 1,342 kilometres of pipeline and has the capacity to handle about 14 billion litres of petroleum products annually.

The network connects the coast with major inland markets including:

• Nairobi
• Nakuru
• Eldoret
• Kisumu

KPC also operates storage, pumping and loading facilities along the network.

This is considerably more efficient than moving all petroleum products by road from Mombasa.

A pipeline can transport large volumes continuously, reducing the number of tanker trucks required and providing a more predictable supply route.

Where does fuel go after the pipeline?

Fuel reaches major storage and distribution centres before being collected by oil marketing companies and other licensed operators.

KPC identifies depots in locations including Mombasa, Nairobi, Nakuru, Eldoret and Kisumu, while its network also supports road and rail loading.

From these locations, petroleum products can be moved by road to retail stations and other customers.

Kisumu has an additional regional role.

KPC operates a marine loading facility there that enables petroleum products to be moved by barge across Lake Victoria, including toward Uganda and other markets in the lake region.

That makes Kenya’s petroleum infrastructure a regional network rather than a system serving Kenya alone.

Who regulates Kenya’s oil industry?

The principal economic and technical regulator is the Energy and Petroleum Regulatory Authority (EPRA).

EPRA’s responsibilities cover petroleum regulation, including aspects of supply, pricing, infrastructure and market participants.

The current regulatory framework rests primarily on the Energy Act 2019 and Petroleum Act 2019, which replaced the previous institutional framework and expanded regulatory responsibilities.

The government ministry responsible for energy and petroleum handles policy, while EPRA provides regulation and oversight.

Other organisations have more specialised roles.

KPC operates major petroleum transportation and storage infrastructure.

NOCK, the National Oil Corporation of Kenya, participates across parts of the petroleum value chain.

Oil marketing companies (OMCs) import, market and distribute petroleum products.

Retail stations ultimately sell fuel to consumers.

How are petrol and diesel prices determined?

Kenya does not simply let each filling station choose any price it wants.

EPRA regulates maximum retail prices for key petroleum products.

The price build-up incorporates the cost of imported fuel and a series of additional components, including freight, storage, transport, taxes and margins. EPRA’s pricing methodology explicitly incorporates the landed cost of imported petroleum products.

That means a change in international oil prices can eventually affect Kenyan pump prices, but the relationship is not one-for-one.

A barrel of crude is only one component of the final retail price.

The consumer price also reflects:

• Exchange-rate movements
• International refined-product prices
• Shipping and insurance
• Storage
• Pipeline and transport costs
• Government taxes and levies
• Oil marketing and retail margins

This is why the price of crude oil can fall while petrol prices do not fall by the same percentage.

For a deeper explanation of the pricing mechanism, see What Determines Petrol and Diesel Prices in Kenya? — if the site maintains the approved article URL separately, it is worth linking directly to that explainer rather than treating crude prices as the only driver.

Kenya’s fuel market is bigger than petrol

Petrol attracts the most public attention because motorists see it on the pump, but diesel is arguably just as important to the economy.

Diesel powers:

• Heavy trucks
• Buses
• Agricultural machinery
• Construction equipment
• Generators
• Industrial machinery

Jet fuel is also strategically important because Kenya has a major aviation sector.

Kerosene remains part of the petroleum market, while LPG occupies a growing role in household and commercial energy.

This means that petroleum demand is closely connected to transportation, agriculture, manufacturing, logistics and aviation.

How much fuel does Kenya use?

Demand varies by product and over time.

KNBS reported that in June 2025 Kenya consumed about 185,300 tonnes of automotive gas oil (diesel), 127,300 tonnes of motor spirit, and 53,000 tonnes of jet fuel during that month.

These figures demonstrate why refining and import infrastructure operate at large scale.

A refinery producing hundreds of thousands of barrels per day would therefore be operating in a market where Kenya itself consumes only part of its output.

That is why a very large refinery in Lamu would have to serve a regional export market, not Kenya alone.

Why the proposed Lamu refinery matters

The proposed Dangote refinery could fundamentally alter the structure of Kenya’s petroleum industry.

The project broke ground in September 2026 in Lamu and is planned to process 700,000 barrels of crude per day, with construction targeted for completion in 2030. Reuters reported that the project is expected to serve a broad East African market and is being designed with a 1,000-megawatt power plant.

That capacity would make it one of Africa’s largest refining projects.

It would also dwarf Kenya’s initial South Lokichar production target.

This creates a crucial question: Where will all the refinery’s crude come from?

Kenya cannot currently supply a 700,000-barrel refinery by itself

This is one of the most important facts surrounding the project.

Kenya’s planned initial domestic oil production of 20,000 barrels per day is nowhere near 700,000 barrels per day.

Even the planned 50,000-barrel-per-day second phase would cover only a small fraction of the proposed refinery’s capacity.

The refinery would therefore need crude from other sources.

Reuters has reported that potential regional sources include South Sudan, Uganda and Kenya, but that each option presents infrastructure, geopolitical or commercial complications.

The refinery could consequently remain connected to the international seaborne crude market even if East African producers eventually supply part of its feedstock.

That distinction matters when assessing claims about “energy independence.”

Could Kenya become energy independent?

Not in the absolute sense.

A refinery can reduce dependence on imported finished petroleum products without eliminating dependence on imported crude oil.

Those are two different things.

If Lamu imports crude, refines it domestically and sells petrol and diesel across East Africa, Kenya would have changed its supply model but would still be exposed to:

• International crude prices
• Maritime shipping costs
• Global supply disruptions
• Exchange rates
• Refinery operating costs
• Regional demand

The more realistic goal is greater refining and supply security, rather than complete isolation from international energy markets.

Kenya’s old refinery versus the proposed new one

KPRL and the proposed Lamu refinery represent completely different scales.

KPRL’s original refinery had a capacity of roughly 12,000 tonnes per day and has been idle since 2013. KPC now uses the facility primarily for storage.

The proposed Lamu refinery would have a headline capacity of 700,000 barrels per day.

That difference is so large that the Lamu project should not be viewed simply as “restarting Kenya’s old refinery.”

It would represent the creation of an entirely new refining industry at regional scale.

Why storage matters as much as refining

Petroleum supply cannot operate reliably without storage.

Fuel consumption continues every day, while ships arrive according to schedules and international supply chains can be disrupted.

Storage provides a buffer.

EPRA says Kenya has more than 1.5 billion litres of petroleum storage capacity, with more than 700 million litres operated by KPC as primary and intermediate storage.

That infrastructure allows imported fuel to be received, held and distributed progressively rather than requiring the country to consume every cargo immediately after arrival.

Storage therefore functions as part of Kenya’s energy-security system.

Kenya also serves a regional fuel market

Kenya is not only supplying Kenyan motorists.

Its petroleum infrastructure supports regional markets in East and Central Africa.

Products can move by road, pipeline, rail and lake transport toward neighbouring countries.

The Kisumu marine facility, for example, allows petroleum products to be exported by barge through Lake Victoria.

That regional role is one reason Kenya’s petroleum sector is strategically important beyond its own population.

It also means that changes in Kenya’s fuel infrastructure can affect neighbouring economies.

Why the Lamu refinery could change the map

The proposed refinery would sit alongside the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor.

That creates the possibility of combining:

deep-water port + crude imports + refinery + petroleum storage + regional distribution.

Lamu could therefore become a major energy gateway for East Africa.

This is one reason the project has implications beyond fuel prices.

A large refinery can attract storage facilities, pipelines, shipping services, engineering companies, industrial users and logistics businesses.

The broader economic effect would depend on whether those supporting industries actually develop.

What about Kenya’s own crude exports?

Kenya’s domestic oil development presents a separate question.

The initial South Lokichar plan envisages crude being transported to KPRL for storage before export. Later development is expected to involve additional infrastructure and higher production.

That means Kenya could initially have the unusual situation of:

exporting crude oil while importing refined petroleum products.

There is nothing inherently contradictory about this.

Crude and refined products are separate commodities, and the economics of exporting locally produced crude can differ from the economics of refining that crude domestically.

The Lamu refinery could eventually change that relationship if it uses Kenyan crude as part of its feedstock.

The biggest structural weakness in Kenya’s oil industry

Kenya has built a sophisticated downstream distribution network without yet having comparable domestic crude production or refining capacity.

That is why the country can move billions of litres of fuel efficiently through pipelines while remaining dependent on imported petroleum products.

The infrastructure is not the problem by itself.

The missing pieces are large-scale domestic production and modern refining capacity.

That is the gap the South Lokichar and Lamu projects are intended, in different ways, to address.

What could go wrong?

The biggest risks are not simply geological.

Crude supply

A 700,000-barrel-per-day refinery needs enormous and reliable feedstock.

Securing that volume at competitive prices will be critical. Reuters has identified crude supply as one of the project’s major challenges.

Financing

A refinery of this scale requires extraordinary amounts of capital.

The project’s ability to secure financing on commercially sustainable terms will influence both construction and eventual operating economics.

Infrastructure

A refinery needs ports, storage, pipelines, power, water, roads and other supporting systems.

Environmental and social concerns

Large petroleum developments can affect coastal ecosystems, communities and land use. Reuters has reported concerns relating to the Lamu project’s environmental and social impact.

Regional competition

The refinery would compete with established refineries and petroleum suppliers around the Indian Ocean and Middle East.

Its size alone does not guarantee profitability.

The petroleum industry’s next phase

Kenya’s oil story is entering a potentially important transition.

For decades, the country has been primarily a consumer, importer and distributor of petroleum products.

The next stage could add two new dimensions:

producer through South Lokichar crude oil, and

refiner through the proposed Lamu project.

If both developments progress successfully, Kenya’s petroleum chain could become much more integrated:

Explore → produce crude → transport → store → refine → distribute → export

That would be a major structural change.

But the transition will take time, and neither domestic oil production nor the proposed refinery eliminates the country’s exposure to international markets.

What Kenya’s oil industry really looks like

The easiest way to misunderstand Kenya’s petroleum sector is to focus on one part of the chain.

Kenya is not simply an oil-producing country.

It is currently a country with discovered oil resources, a large imported-fuel market, an extensive downstream distribution system, an inactive conventional refinery, and a major new refining project under development.

Its existing strength is the infrastructure connecting Mombasa to inland markets. Its biggest emerging opportunity is to add domestic crude production and large-scale refining to that network.

The decisive question for Kenya is therefore not whether it has oil underground. It is whether the country can connect production, refining, storage, pipelines and regional markets into a commercially viable system. South Lokichar could supply the crude; Lamu could provide new refining capacity; and KPC’s pipeline network can move petroleum across the country. If those pieces work together, Kenya could evolve from primarily importing and distributing fuel into a more influential regional petroleum hub.