Fuel diversion to transit continues, as Kenya stares at another fuel crisis

The country could be staring at, yet another fuel shortage linked to fuel supply challenges brought about by insufficient local stocks in the market.

An independent dealer who sought anonymity says that the country has enough fuel stocks but there are importers who are prioritizing the export markets at the expense of the local market. The dealer has cited data which was revealed during a closed-door meeting held among Petroleum stakeholders yesterday.

Such importers have 100 per cent transit stock including Esteem energy Limited, Oilhub Limited, Alba Petroleum Ltd, Sakina Gas Company, Nexus Petroleum Limited, and OilGen Petroleum Limited among others. These companies do not own a network of petrol service stations to serve the public. The slow uptake of their fuel clogs the pipeline. 54 KRA has, in the recent past, threatened to auction such fuel belonging to these importers waiting for exportation.

EPRA has also written to them recently requiring them to sell these stocks to oil marketers with petrol stations and has promised to reduce their allocated capacity at KPC and give more space to Oil marketers selling locally. The importers are expected to adhere to the ratio of 60:40 for local: transit but this has not been the case.

“The Kenya Pipeline Company (KPC) is still holding more transit stocks than for local. Until this issue is resolved, we will be back in a stockout situation by next week,” the dealer said.

During a forum held between the Energy and Petroleum Regulatory Authority (EPRA), KPC, Kenya Revenue Authority (KRA), Oil Marketing Companies (OMCs) and independent dealers’ representatives it was discussed that as of April 20, total local stocks at KPC stood at 46.8 million litres of petrol and 64.64million litres diesel.

This stock is expected to last for 8 days for petrol and 10 days for diesel. On the other hand, petrol stocks for transit stand at 70.3million for petrol and 61.77million for diesel to last for 19 days and 15 days respectively.

The independent dealer was of the view that government authorities need to understand that this basically is the problem and direct their energy to this issue. EPRA and the Ministry of Energy are yet to resolve this disproportionate allocation of fuel, that puts fuel in the hands of transit traders, over local fuel dealers.

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