Limping economy sees lower uptake of fuel and electricity

Energy consumption in the country declined sharply in the quarter to June this year, owing to the slowdown in the economy.

This is after the government put in place containment measures to curb the spread of the coronavirus.

Consumption of both oil products and electricity is, however, on the recovery with the uptake of power and petroleum in June nearing levels seen earlier this year prior to the pandemic.

Over the quarter to June, consumption of diesel - which is heavily used in manufacturing and transport sectors - declined by more than 22 per cent, according to new data by the Energy and Petroleum Regulatory Authority (Epra).

Jet fuel also declined 74 per cent as airlines grounded their fleets following the ban on international travel as well as the cessation of movements in several counties.

The sharp decline was seen in April. The uptake of petroleum products dropped by about 30 per cent compared over a similar month last year.

The amount of super petrol Kenyans consumed in April nosedived 34 per cent to 114,000 tonnes compared to 173,000 tonnes consumed in April last year.

Diesel consumed declined 30 per cent to 162,900 tonnes against 231,700 tonnes last year. Over the first half of the year, the consumption of petroleum products reduced by 10 per cent.

The industry appears to have recovered in June following the lifting of some of the restrictions.

Over the month, motorists bought 144,000 tonnes of petrol, only slightly lower than the 145,000 tonnes consumed in April last year, as well as in March (154,000), before the restrictions were put in place.

Electricity consumption declined 10 per cent over a similar month. A recent statement by the Energy ministry noted that other than the drop in consumption, consumers – including major government institutions – are defaulting on bill payments.

It estimated that Kenya Power’s revenues over the quarter to June would reduce by Sh5.6 billion, while defaults would stand at 8.7 per cent. At the regional level, the consumption of petrol dropped by 25 per cent over the first five months of this year.

Energy Regulators Association of East Africa (Erea) Executive Secretary Geoffrey Mabea said Covid-19 had also caused a five per cent drop in electricity demand across the region.

“Petrol use dropped by 25 per cent while diesel slid by seven per cent,” he told The Standard by phone.

Dr Mabea said Erea is working on frameworks that will facilitate smooth energy trade in the region.

He said the energy regulators in the region had developed a tool that would enable member countries to share data on their usage of electricity, which would, in turn, deepen trade in power across the region.

“It is now under one-stop for comparison. The East African Community (EAC) energy sector is becoming a global village where you can easily know what is going on in the sector at the touch of a button,” Mabea said.

“This will lead to the harmonisation for the methodology of arriving at prices in the region.”

Numerous tools

The EAC energy regulators, he said, have developed numerous frameworks and tools that are under implementation in various regulatory institutions.

According to Mabea, petroleum retail stations regulations and LPG cylinder exchange pool frameworks have been designed to increase efficiency in the petroleum energy sector.

“The region has also carried out critical research geared towards increasing innovation in the region,” he said.