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Kenya's path away from oil dependence

By Jit Bhattacharya - Jun 14th 2022
The answer is simple and clear: Electric Transport. [iStockphoto]

In the past months, Kenyans have been forced to grapple with the pain and uncertainty of fuel shortage and costs rising to historic highs.

If you drove down any street in Nairobi in April, you could see the impact on daily life. Kilometre-long queues of vehicles at all hours of day and night causing traffic jams around every petrol station. Individuals swarming petrol stations with jerry cans and water bottles waiting for hours to purchase whatever fuel was available.

Households and businesses were forced to make daily choices to ration fuel while commercial buses and trucks were forced to limit operations due to fuel being unavailable or too expensive. This crisis extended well beyond fuel at the pump.

As transport slows and becomes more expensive, businesses struggled to operate and commodity prices rose, impacting the bottom line for thousands of Kenyans.

Inflation in Kenya now stands at 6.3 per cent and higher costs are now a painful daily reality for all Kenyans.

There is already plenty of finger-pointing on who is to blame for this crisis. Some point to delays in the Government of Kenya making its promised fuel subsidy payments to petroleum marketers. Others point to those same marketers hoarding petrol hoping to fetch higher prices. Still others will point to panic-buying from consumers, fearful fuel stations running dry or a major rise in the price of fuel just around the corner.

These accusations miss the broader issue: Kenya’s economy is wholly dependent on the uncertainty and volatility of imported petroleum fuel. Since launching the fuel price stabilization program in April 2021, the Government of Kenya has spent Sh3 6 billion ($313 Million) in payments to foreign-owned petroleum companies in an effort to keep fuel prices stable.

This expenditure alone represents 5 per cent of Kenya’s current account deficit, and fuel companies are claiming that the government owes them an additional Sh20 billion ($173 Million). With the latest round of price adjustments, the government is now subsidizing Sh29 for every litre of petrol and Sh40 for every litre of diesel used.

With every litre of fuel we use here in Kenya, funds from our national treasury will be sent to foreign energy companies to support a product that pollutes our air, destroys our climate, and destabilizes our economy.

This dependence on imported petroleum is a shackle on Kenya’s growth and development. The most important question we should be asking ourselves is how do we free ourselves of this burden and ensure this is Kenya’s last fuel crisis.

The answer is simple and clear: Electric Transport. Kenya has the energy to power our transportation system within its borders.

Kenya currently generates a surplus of clean renewable electricity. Thanks to large reserves of geothermal energy and hydropower, Kenya’s electricity is already over 90 per cent renewable, making the country a global leader in clean electricity. The surplus supply of renewable electricity is waiting to be used by commercial and industrial consumers. With new electric vehicle technology, this same energy can be used to power our transportation system.

Imagine if the money being spent in payments to foreign petroleum companies instead supported a clean transportation system that made use of energy produced here in Kenya. This is the path to ensuring Kenyans’ resilience to high oil prices and fuel shortages.

The idea of electric transport in Kenya is not some wishful future. The shift to electric transport is happening right now.

BasiGo’s first two electric buses are already in passenger operations with CitiHoppa and East Shuttle, carrying passengers every day in Eastern Nairobi.

Ampersand, Roam, ArcRide, EcoBoda and a number of other Kenyan companies are already offering electric motorcycles and electric tuk tuks with business models that make them affordable and easy to use.

Finnish company Nopea Ride has been offering electric taxi services across Nairobi for years. These local companies are creating a new technology-driven economic sector, creating jobs in energy, vehicle manufacturing, charging infrastructure, and maintenance services.

To help unlock this momentum the World Resources Institute launched the Africa Mobility Initiative, an accelerator that connects mobility startups in Kenya and Uganda to needed resources and funders.

And it established Digital Transport for Africa, a collaborative digital commons that provides urban mobility developers in Africa easy access to standardized data, software, and knowledge for strategizing their growth paths.

Powered by Kenya’s renewable energy, and supported by partners, these companies are putting Kenya at the forefront of the global sustainable mobility revolution. 

Rather than asking who is to blame for the current fuel crisis, now is the moment for us to accelerate the shift to electric mobility in Kenya. There is plenty that needs to be done. We need to invest in strengthening the grid and making it smarter to support daily charging of thousands of electric vehicles.

We need to accelerate the deployment of charging and battery swapping infrastructure to give confidence to vehicle operators who would like to switch from diesel or petrol to electric.

We need policies to help establish local electric vehicle manufacturing in Kenya and to help consumers and businesses adopt the technology. An association of electric transport developers has recently been established to tackle these issues in partnership with utility and government stakeholders.

The answer to our current fuel crisis in Kenya is not who is to blame. The answer is how quickly can we end our dependence on petroleum energy from overseas, and begin building our economy on the foundation of Kenya’s abundant renewable resources. 

Fuel costs continue to rise with no definitive end in sight as yet. Electrifying our transport sector is our path to energy independence, growing prosperity, and resilience to a fickle international oil market. The best thing we can do for our country is to reduce the oil’s relevance to our economy and our daily life.

Written by Jit Bhattacharya, Co-Founder and CEO of BasiGo Inc; and Rebekah Shirley PhD, Director of Research, Data, and Innovation at WRI Africa. 

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