Kenya will not stand in the way of Uganda and Tanzania as they pursue their own oil refinery projects, President William Ruto has said, arguing that the region's petroleum needs are too large to be served by a single facility.
Ruto said Kenya was prepared to work with its neighbours in the petroleum sector, including buying fuel from Uganda if it can be delivered to the Kenyan market at a competitive cost.
“There is no bad blood at all. There is no problem,” Ruto said on Thursday.
Speaking during an interview with the media at State House, Mombasa, the President said he had discussed Uganda's refinery plans with President Yoweri Museveni.
According to Ruto, the two leaders agreed that Uganda could proceed with a smaller refinery while Kenya continues with its planned facility in Lamu.
He said Kenya's interest would be in securing petroleum products at the best possible cost, regardless of where they are produced in the region.
“If it is manufactured there in Uganda and the oil from that place is near Busia, and it can reach Busia at a lower price, we will buy oil from anywhere and bring it to Busia,” he said.
Ruto said the size of the East African petroleum market meant there was sufficient demand to support more than one refinery.
He also pointed to Tanzania's proposed refinery in Tanga, saying Kenya would not view the project as a threat to its own plans.
Instead, Ruto said Kenya could take a financial stake in the Tanzanian facility if the project goes ahead.
“Even if the one in Tanga is built, we as Kenya will go and buy some shares there. There is no problem,” Ruto said.
The President's remarks followed his participation in the groundbreaking of the Lamu refinery project a day earlier.
The facility is expected to form part of a broader industrial complex, with Ruto saying its impact will extend beyond the production of petroleum products.
He said the refinery would give Kenya a way to reduce its exposure to changes in international oil prices and disruptions linked to conflicts and instability in oil-producing countries.
Local refining, he added, would also cut some of the expenses Kenya currently incurs when importing finished petroleum products, including transport and insurance costs.
“Lamu will give us an opportunity to have fuel without the fluctuations that we have now,” he said.
Ruto said Lamu would not, however, be expected to meet the entire petroleum demand of East Africa.
This, he said, leaves room for other countries to develop their own refining capacity while still allowing the region to benefit from cross-border trade in petroleum products.
The government also plans to establish industries around the Lamu refinery, with additional land being allocated for businesses that can use products and by-products from the facility.
These include petrochemical, chemical and plastics industries, while the project could also support production of fertiliser and bitumen locally.
Ruto said such industries would reduce reliance on imports while opening opportunities for investment, employment and trade.
He said the wider refinery development could also strengthen economic ties between East African countries as businesses source products from different facilities based on price and availability.
The President maintained that Kenya's position was to allow the market to determine where petroleum products should be sourced.
He said refineries in Kenya, Uganda and Tanzania could therefore operate at the same time, with each contributing to the region's petroleum supply and wider economic development.