NATIONAL WEALTH

It makes sense to refine own oil than exporting it crude

Will also allay fears that revenue will be diverted to individuals' offshore accounts.

In Summary

• First order of business, once we get the money, should be revamping the East African Oil Refineries in Changamwe.

• With our petroleum refinery up and running, a beehive of economic activities will emerge.

Tankers that transported crude oil from Turkana County at the Mombasa Oil Refinery in Changamwe, June 6, 2018.
Tankers that transported crude oil from Turkana County at the Mombasa Oil Refinery in Changamwe, June 6, 2018.
Image: ANDREW KASUKU

Last Thursday President Uhuru Kenyatta announced that Kenya had joined the league of oil-exporting countries after striking a deal to export 200,000 barrels worth Sh1.3 billion. He expressed confidence that the new oil trade would help grow the economy and end poverty.

This is good news to all Kenyans, especially those wallowing in poverty in rural areas and urban slums. The best way to ensure that every Kenyan feels the impact of this newfound wealth is to open an exclusive bank account where the revenue will be deposited, and withdrawn to be spent on specific projects that will derive immediate benefits to all.

For instance; the first revenue earning should immediately go towards revamping the stalled and one-time famous East African Oil Refineries in Changamwe, Mombasa, as a way of value addition. This will make our crude oil earn more revenue than when it is shipped to be refined overseas. Moreover, the revival of the refinery will be in line with the President's Big Four agenda of manufacturing and job creation.

It is obvious that our refined oil products will retail at half the price of the current imported and already refined ones we buy. Furthermore, our electricity costs will drop more than 50 percent. This will attract various manufacturers, who had relocated to other countries, where electricity is cheaper than ours, to come back and create more jobs.

This will enable us to capture most of the African oil market with our cheap refined petroleum products, before our neighbours build and start refining their newly discovered oil.

It is to our best economic advantage to rush and reopen our already existing but idle refinery, and start refining our crude oil. This will enable us to capture most of the African oil market with our cheap refined petroleum products, before our neighbours build and start refining their newly discovered oil.

With our petroleum refinery up and running, a beehive of economic activities will emerge. We will need to buy hundreds of high-capacity oil tankers, and employ thousands of youths to drive them, supplying our oil to various markets in sub-Saharan Africa. ln this way we shall still be regarded as an oil-exporting country, within the continent, and not necessarily when shipped overseas.

With cheap electricity and oil at household level, people will be able to venture into dairy and poultry keeping. This will create wealth for many Kenyans, as well as unite them because they will be proud of having an equal share in the newly discovered natural wealth – oil.

In fact, preaching peace and unity to people who continue to be impoverished by greedy and corrupt leaders is just an exercise in futility. It is said a hungry man is an angry man. Countries which we complain of flooding our markets with cheap products such as eggs, fish, fruits etc do so because production costs (power) are very cheap, unlike in Kenya where profiteering cartels have made production too expensive for the majority.

By giving top priority to refining our crude oil locally, that will allay fears that revenue gotten from crude oil shipped overseas might be diverted to some individuals’ offshore bank accounts--the same way part of Eurobond money is suspected to have gone.

Moreover, it would be foolhardy to export our crude oil cheaply on one hand but on the other import refined oil at expensive and fluctuating global OPEC prices. The discovery of oil has turned out to be a curse to some countries, especially in Africa, where the ruling elite divert revenue from the oil to their private offshore bank accounts, leaving their subjects wallowing in eternal poverty. The Kimwarer and Arror dams scandal, plus the Kiambu county corruption saga, should be a warning sign that this can happen to our oil.