Role of Government Environmental Regulations on Petroleum Supply Chain Management in Kenya

Abstract

There has been increased consumption of petroleum products in the recent past in Kenya as the country seeks to achieving 2030. This increased consumption has obvious implications for the operations of the petroleum industry in the country (both upstream and downstream), including the risks posed to the natural environment and human safety. This study sought to assess the role of government environmental regulations on petroleum supply chain management by surveying oil marketing companies in Kenya. A sample of 180 respondents was randomly selected from 36 oil marketing companies. Data was quantitatively analyzed using SPSS for descriptive statistics and inferential while AMOS was used for structural equation modeling. Results showed high awareness level (73%) of the existence of environmental regulations among oil marketing companies’ staff. Government environmental regulations also positively influence petroleum supply chain management for they lead to quality petroleum products, high compliance levels as well as greening of the supply chain despite high operational costs. A consultative approach should be considered when developing these regulations and there is need for government to embrace continuous inspections to achieve sustainable environmental management. There is need for the industry players to adopt supply chain management practices that promote greening the petroleum supply chain.