Kenya: Country stares at another fuel crisis as diversion of fuel to public transport continues

Nairobi – The country could face another fuel shortage linked to fuel supply problems caused by insufficient local stocks in the market.

An independent dealer who requested anonymity told Capital Business that the country has enough fuel stocks, but some dealers still favor export markets over the local market.

He cited data revealed during a closed-door meeting between energy players.

A week ago, Cabinet Secretary for Energy and Petroleum Monica Juma raised similar concerns around the country even as she accused a group of oil marketing companies of hoarding stocks of fuel and/or diverting it to export markets, further aggravating the crisis.

Importers are supposed to respect the 60:40 ratio for local transit, but this has not been the case.

The slow absorption of their fuel by export markets clogs the pipeline.

The KRA has in the recent past threatened to auction off this fuel belonging to these importers awaiting export.

EPRA also wrote to them recently asking them to sell these stocks to oil marketers with filling stations and promised to reduce their allocated capacity to KPC and give more space to oil marketers selling locally.

Oil traders are expected to adhere to the 60:40 ratio for local:transit, but this has not been the case.

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

At a forum held between the Petroleum and Energy Regulatory Authority ( EPRA ), KPC, Kenya Revenue Authority ( KRA ) and Independent Petroleum Marketing Company ( OMC ) Dealer representatives , it was discussed that as of April 20, total local inventory at KPC stood at 46.8 million liters of gasoline and 64.64 million liters of diesel.

This stock should last 8 days for gasoline and 10 days for diesel.

On the other hand, gasoline stocks for transit amount to 70.3 million for gasoline and 61.77 million for diesel to last 19 days and 15 days respectively.

The Department of Energy noted on Monday that fuel supplies had returned to normal after a nearly two-week shortage caused by hoarding of the product.

The government is keen for the National Oil Corporation of Kenya to import at least 30% of volumes, which will reduce over-reliance on independent dealers and ensure a steady supply to independent dealers in the country.

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