Fuel shortage hits ahead of price review

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Fuel shortage hits ahead of price review


People line up with jerry cans at a gas station in the town of Eldoret, Uasin Gishu county. PICTURES | JARED NYATAYA | NMG

Motorists have been hit by a fuel shortage following rationing at some outlets in Nairobi, fearing traders have cut volumes in anticipation of rising prices from midnight Wednesday.

Spot check by the business daily revealed that the shortage hit the city from last Friday, with premium gasoline being the most affected of the three regulated fuels.

The shortages come days before the official release of new prices which will be in place for a month as oil traders anticipate an upward revision to prices at the pump.

The Kenya Pipeline Company (KPC) warned last week of an impending shortage of Super gasoline due to high diesel stocks in tanks and the pipeline, which has reduced the space available to evacuate and transport Super from its depots in Nairobi and elsewhere.

“Supplies have been affected since last week, fuel orders from depots have been cut. The situation could be worse if tomorrow (Tuesday) was not a public holiday,” said an attendant at one of the city’s Shell stations.

Fuel attendants at the Shell outlet along University Way revealed they had been struggling with a shortage of Super since last week, adding that fuel supplies had been reduced from around 25,000 liters to 4,000 liters.

Most of the affected stations are Vivo Energy run-Shell, Total Energies, Rubis and National Oil Corporation of Kenya outlets along Mombasa and Ngong roads.

Oil marketers did not respond to questions at press time, but the shortage has rekindled fears of fuel hoarding ahead of the new price schedule to be announced tomorrow.

In the past, traders have been accused of hoarding fuel in anticipation of the price hike to be announced by the Energy and Petroleum Regulatory Authority (Epra).

In April, traders withheld the goods in silent protest at the delay in state compensation under the fuel stabilization program.

Last week, KPC chief executive Macharia Irungu called on the government to speed up payments and ease financial hardship that has been blamed on poor diesel evacuation from KPC’s facilities.

Mr Irungu revealed last week that oil traders had drastically reduced the amount of diesel they were draining from the pipeline, reducing the fill levels needed to transport the super.

Trough refers to the volume left empty in a tank or pipeline so that there is room for the fuel to expand.

Since July, oil traders have failed to respond to calls from KPC to increase their diesel hikes, citing financial difficulties due to delays in government compensation.

“Based on the small increases seen in Western Kenya, we are likely to source MSP (super) in Western Kenya from tomorrow 8th September as its receipt is hampered by major batches of AGO (diesel),” Macharia said. week in a letter to Principal Petroleum Secretary Andrew Kamau.

The diesel accumulations affected Kipevu Petroleum Storage Facility, Kenya Petroleum Refineries Limited and VTTI Kenya, the three facilities where KPC stores imported fuel at the port.

For example, on July 3 and 4, the transport of the super to western Kenya was delayed by 24 hours while between the 17 and the 21 of last month, the transport of the goods to Nairobi and then to western Kenya was delayed for three days.

Oil traders are grappling with clearing arrears estimated at 35 billion shillings for the monthly cycles of June-July, July-August and the one expiring tomorrow.

The Treasury cited funding constraints as the reason for the delays amid growing pressure to scrap the fuel stabilization program that was rolled out in April last year.

Delays in compensation have forced oil majors and independent dealers to rely heavily on bank loans to pay for imported shipments.

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