Advertisement Kenyas Oil Demand Rises 5.4% as KCB Deepens Support for Energy SecurityKenyas petroleum sector recorded resilient growth in the first quarter of 2026, with fuel consumption rising by 5.4 percent year-on-year as stable macroeconomic conditions, strong consumer demand and strategic financing continued to strengthen the countrys energy security.Data released by the Petroleum Institute of East Africa (PIEA) during its Q2 2026 State of the Oil Industry Briefing shows total petroleum consumption increased from 1.57 million cubic metres in the first quarter of 2025 to 1.65 million cubic metres during the same period this year.Diesel, petrol and kerosene led the growth, reflecting sustained economic activity, increased transport demand and continued household consumption.The industry performance comes against the backdrop of contained inflation, a stable Kenya shilling and lower interest rates, creating favourable conditions for businesses and consumers despite persistent geopolitical uncertainty affecting global energy markets.Kenyas Oil Demand Rises 5.4% as KCB Deepens Support for Energy SecurityStrong Demand Signals Economic ResiliencePIEA reported that diesel consumption grew by 9.9 percent, while premium motor spirit increased by 9 percent. Kerosene consumption also rose by 11 percent during the quarter.Although jet fuel and fuel oil consumption declined by 9.5 percent and 10.6 percent respectively, overall petroleum demand remained strong, highlighting the resilience of Kenyas transport, commercial and household sectors.The report also showed continued momentum in clean energy adoption. Liquefied Petroleum Gas (LPG) consumption climbed by 17.7 percent, rising from 105,326 metric tonnes in the first quarter of 2025 to 123,974 metric tonnes in Q1 2026. PIEA attributed the growth to government initiatives such as zero-rating LPG and implementing the National LPG Growth Strategy, which continue to encourage households to transition from traditional cooking fuels.Retail outlets remained the countrys largest petroleum consumers, accounting for 53.1 percent of total domestic fuel sales, followed by resellers at 16.5 percent and civil aviation at 13.8 percent.The industry also witnessed heightened competition among oil marketers. Vivo Energy, Rubis Energy and TotalEnergies retained their leadership positions, while Stabex International strengthened its market share and emerging players such as One Petroleum, Be Energy and Galana continued expanding their footprint.KCB Highlights Financing as a Pillar of Energy SecuritySpeaking during the industry briefing, KCB Director of Corporate Banking Peter Ngeno said energy security depends not only on physical fuel infrastructure but also on strong financial systems that can withstand global shocks.The challenge today is no longer simply about ensuring adequate fuel supplies. It is about creating systems that can anticipate disruption, absorb shocks and continue delivering reliable energy under changing global conditions, he said.Ngeno noted that geopolitical tensions, supply chain disruptions, foreign exchange volatility and the global transition to cleaner energy continue to reshape the petroleum industry, requiring closer collaboration between governments, financial institutions and industry players.He said KCB has positioned itself as a long-term partner across the oil and gas value chain by financing upstream exploration, midstream logistics and downstream petroleum distribution throughout the region.The banks most significant contribution came under Kenyas Government-to-Government (G-to-G) fuel importation programme launched in 2022 to stabilise fuel supplies and ease pressure on the countrys foreign exchange reserves.KCB stepped forward as the primary financial partner under the Government-to-Government fuel importation programme where we mobilised our expertise, capital strength and international banking relationships to ensure the programme became operational, said Ngeno.He revealed that KCB has so far issued Letters of Credit worth more than KSh1.074 trillion under the programme, facilitating petroleum imports that continue to power households, businesses and industries across Kenya.Financing the Future Energy MixNgeno observed that recent tensions in the Middle East had once again demonstrated the vulnerability of global fuel supply chains, particularly for countries that rely heavily on imported petroleum products.He argued that Africas future energy strategy must balance traditional fuels with investments in cleaner technologies and renewable energy to support industrialisation while strengthening long-term resilience.This transition presents significant opportunities for investment in cleaner technologies and renewable energy infrastructure. KCB continues to develop innovative financing structures that support tomorrows energy solutions because the choices we make today will determine whether our economies are prepared to withstand future disruptions, he said.He added that East Africas growing population, rapid urbanisation and expanding industrial base will continue driving energy demand, making financing increasingly critical to ensuring stable supply.PIEA said the sectors positive performance demonstrates the importance of stable macroeconomic policies, resilient supply chains and sustained investment across the petroleum value chain.The institute noted that contained inflation, exchange rate stability and accommodative monetary policy supported petroleum demand during the quarter, while increased LPG uptake reflects Kenyas broader transition towards cleaner household energy.As the industry navigates an increasingly uncertain global environment, stakeholders agreed that stronger collaboration between government, financiers and private sector players will be essential to safeguarding Kenyas energy future.For KCB, that collaboration remains central to its role as a financial partner.The future of East Africas energy sector will not be shaped by any one institution acting alone. Governments must provide enabling policies, industry must invest in innovation, and financial institutions must provide the capital that turns ambition into reality, Ngeno said.With petroleum demand continuing to grow and competition intensifying across the market, Kenyas energy sector appears well positioned to support broader economic expansion while gradually transitioning towards a more resilient and sustainable energy mix.The post Kenyas Oil Demand Rises 5.4% as KCB Deepens Support for Energy Security appeared first on Africa Business News.

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