A growing reliance on imported fossil fuels is costing Kenya more than half a trillion shillings every year, with a new report warning that the country will continue losing billions unless it speeds up the shift to cleaner sources of energy. The findings argue that reducing fuel imports would not only save public money but also shield the economy from frequent changes in global oil prices.
The report, Beyond Fossil Fuels: Visions for Economic Diversification in Kenya, says Kenya spends more than Sh516 billion annually importing petrol, diesel and coal. It says the country can gradually reduce this spending by expanding renewable energy, embracing electric transport and investing in industries that are less dependent on imported oil.
“Kenya leads the way in renewable electricity generation, yet fossil fuels cost its economy billions every year,” the report says.
“Although national climate policies have brought some progress in reducing emissions, true progress demands phasing out fossil fuel subsidies, investments and infrastructure.”
Researchers say Kenya's continued dependence on imported fuel leaves the country exposed to international price fluctuations while consuming resources that could instead support key public services and other development programmes.
According to the findings, the country spent Sh169 billion on fuel stabilisation programmes between 2021 and 2024 to cushion consumers from increasing fuel prices. The report says such expenditure could have been directed to other national priorities.
The study was produced under the Fossil Fuel Treaty Initiative, a partnership bringing together nation-states and civil society organisations seeking a global transition away from coal, oil and gas.
Speaking during the launch of the report, Kenyan researcher Tracy Tunge of University College London rejected claims that fossil fuel extraction offers a quick solution to Kenya's debt burden.
Some have argued that the country's fossil fuel reserves could help reduce the national debt, which currently stands at about Sh12 trillion.
“While the country earns an estimated Sh421 million annually from fossil fuel revenues, it would take us over 30,000 years to repay the debt even if the entire amount went to debt repayment,” Tunge said.
She added that even under the most optimistic estimates, revenue from oil production would still require between 50 and 130 years to clear Kenya's debt, showing that fossil fuels cannot provide the financial breakthrough many expect.