Energy and Petroleum Cabinet Secretary Opiyo Wandayi has pushed back against growing scrutiny over the proposed Tanga oil refinery, telling senators that Kenya must only commit to refinery investments that are backed by strong market demand and clear economic returns, as questions mount over the country’s refining direction and regional energy partnerships.
While addressing the Senate Plenary on Wednesday, Wandayi said refinery projects cannot be justified on political enthusiasm or regional excitement, insisting that commercial viability remains the main test before any such investment is undertaken.
“Refinery business is a matter of commercial logic. It must make commercial sense for one to undertake a refinery business,” he said.
He reminded lawmakers that Kenya’s earlier attempt to operate a refinery at Changamwe was eventually halted after it became financially unsustainable.
“The refinery in Changamwe due to the economics was found not to make business sense and that’s why as a matter of fact, operations and the facility were discontinued,” Wandayi said.
Wandayi also pointed to expected oil production from the South Lokichar fields, noting that output levels are still far below what is needed to support refinery operations.
“We shall be producing about 20,000 barrels per day, which will progress to some 50,000 barrels per day,” he said. “Petroleum economists tell us that you need some 100,000 to 500,000 barrels per day to be able to run viably a refinery.”
His explanation came after concerns were raised in the House by Mombasa Senator Mohamed Faki, who sought clarity on government intentions regarding refinery development, especially in light of existing infrastructure that has struggled to operate at full capacity.
Faki questioned the rationale behind shifting attention to new refinery arrangements and possible external partnerships while earlier facilities remain underused.
Wandayi maintained that refinery planning must remain anchored on economic practicality, stressing that long-term sustainability should guide decision-making rather than short-term political expectations.
In a related development, President William Ruto defended the Tanga refinery proposal during a joint briefing in Dar es Salaam on May 4, framing it as part of a wider regional push to strengthen industrial growth across East Africa.
“Allow me to explain our discussion on Tanga as a place of refinery… the building of a refinery is a big opportunity, for business, industrialization, petrochemical industries, fertilizer production and plastics industries,” he said.
Ruto said the idea emerged from consultations involving regional leaders, including Uganda’s President Yoweri Museveni, aimed at using shared natural resources to build stronger manufacturing bases and create jobs.
“Our discussion was about how to industrialize our region using our resources… to create wealth, jobs and expand opportunities here,” he said.
He further explained that the refinery project is expected to be structured as a regional investment involving Kenya, Uganda and other partners, supported by infrastructure such as pipelines connecting Mombasa and Tanga.
“The good people of Tanzania are lucky that we are discussing how to build a refinery in Tanga,” he said, adding that the plan is intended to reduce reliance on exporting raw materials.
“It is not tenable anymore for us to export raw materials. We must be deliberate not to export jobs, not to export opportunities, but to create them here,” he added.
Wandayi, however, reiterated in his Senate remarks that regardless of the regional ambitions surrounding the project, any refinery decision must still meet strict economic thresholds based on output, demand and long-term feasibility.