East Africa Refined Petroleum Products Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The primary energy consumption in East Africa is expected to record a CAGR of more than 3.5% during the forecast period of 2022-2027. The outbreak of COVID-19 in Q1 of 2020 negatively impacted the region's refined petroleum products market. Lockdown restrictions imposed by various governments in the region have lowered the demand for petroleum products. For instance, countries like Tanzania stopped flights to and from neighboring countries like Kenya. Factors such as increasing demand for refined petroleum products in the transportation and industrial sectors are likely to drive the market in the forecast period. An increase in electricity generation from oil also creates significant demand for refined products in East African countries. However, a lack of investments and slow urbanization in some countries in the region are expected to restrain the market growth during the forecast period.

• Middle distillate oil products are expected to dominate the market in the forecast period, owing to demand in different sectors, like power generation, transportation, and others.
• With more than 140 million people not having access to electricity in 2019 and growing consumption of refined petroleum products from end-user industries, East Africa can create ample opportunities for electricity generation using oil and gas products.
• Kenya is expected to dominate the market during the forecast period due to the country's growing demand for gas and oil.

Key Market Trends

Middle Distillates to Dominate the Market

• Middle distillate refers to refined oil products between lighter fuel like gasoline and heavier fuels like fuel oil. It mainly comprises jet fuel, kerosene, diesel, and others.
• Kenya witnessed an increase in the consumption of refined products in 2020. Light diesel oil and gasoline led the market with daily consumption at 2,157.6 thousand metric ton and 1395.3 thousand metric ton, respectively.
• Additionally, front-end engineering and design (FEED) work on the Ugandan refinery has been completed, with a final investment decision (FID) to be made in August 2022. The refinery is expected to be operational by 2023, significantly driving the refined products market.
• With growing demand in the transportation and power generation sectors, among others, the demand for middle distillates is expected to grow further and dominate the market in the forecast period.

Kenya to Dominate the Market

• According to the International Energy Agency, the demand for gas consumption is expected to grow significantly in Kenya in the future, owing to both overall African and Kenyan ongoing policy scenarios.
• The construction of new oil terminals and refineries in the country will also support the growth of refined petroleum products. For instance, the new Kipevu Oil Terminal in Mombasa, Kenya, is due to start operations in January 2022 and will see Kenya double its handling capacity to transport petroleum products to Uganda, Burundi, and Rwanda from the current 35,000 ton. The terminal is expected to drive the growth in the market significantly.
• The primary energy consumption by Kenya of oil is expected to reach more than 13 megaton of oil equivalent (Mtoe) by 2040, creating significant demand for refined petroleum products as well.
• In December 2021, Kenya Pipeline Company KPC and Kenya’s Ministry of Energy announced plans to set up a dedicated LPG storage facility with a capacity of around 25,000 ton, which is expected to have a positive impact on the market studied.
• With increases in population and demand for refined petroleum products from end-user industries like automotive and petrochemical industries, the refined petroleum products market in Kenya is expected to dominate the market over the forecast period.

Competitive Landscape

The East African refined petroleum products market is moderately fragmented. Some of the major companies include TotalEnergies SE, Shell PLC, KenolKobil Ltd, National Oil Ethiopia PLC, and Vivo Energy PLC.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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