The storage of crude oil in Kenya is a critical component of the petroleum supply chain, regulated by EPRA to ensure safe and secure handling of this strategic resource. Businesses operating crude oil storage facilities must obtain the appropriate licence before commencing operations.
Licence Application Process
Applications are made through EPRA’s online licensing portal. The process includes detailed technical submissions due to the specialized nature of crude oil storage. EPRA conducts comprehensive reviews, including site inspections, environmental impact assessments, and safety audits before granting approval.
Fee Structure
No fees are charged for Petroleum Business Licences issued by EPRA. This applies to crude oil storage licences as well. The Authority’s fee-free policy covers all petroleum sector activities, including storage operations.
Documentary Requirements
Crude oil storage licence applicants must submit:
- Certificate of Incorporation/Business Registration
- CR12 and director identification documents
- Tax Compliance Certificate
- County government Single Business Permit
- Detailed engineering drawings of storage facilities
- Environmental Impact Assessment (EIA) license from NEMA
- Fire safety certificates and emergency response plans
- Proof of land ownership or long-term lease
- Storage tank specifications and certification
- Safety management system documentation
- Insurance coverage for storage facilities
Cost Considerations
The indirect costs for crude oil storage are among the highest in the petroleum sector:
- Land acquisition and preparation
- Construction of specialized storage tanks
- Fire suppression and safety systems
- Environmental protection infrastructure
- Security systems and personnel
- Monitoring and control systems
- Compliance with international standards (API, OSHA, etc.)
Regulatory Framework and Penalties
Crude oil storage is subject to multiple regulatory layers, including EPRA, NEMA, county governments, and fire safety authorities. Illegal storage of petroleum products can result in fines of not less than KSh 10 million under the Energy Act, 2019, plus potential criminal prosecution. Environmental violations may attract additional penalties from NEMA.
While EPRA does not charge licence fees for crude oil storage, the capital and compliance costs are substantial. The regulatory environment is designed to ensure that only operators with the financial capacity, technical expertise, and commitment to safety can enter this critical sector. The fee-free licence policy helps offset some of the regulatory burden, but the overall investment required remains significant.
