Fuel Shortage Looms as Price Hike is Anticipated Ahead of New Monthly Rates

A fuel shortage atmosphere looms in the country and motorists will likely find themselves paying more as marketers hoard stock in anticipation of better monthly rates.

Analysts warn that the new monthly rates will present a hike in fuel prices since a barrel of oil hit 71 US dollars in the global market yesterday, a 0.5 percent increase compared to Friday’s prices.

Several petrol stations in Nairobi are already show declining volumes with attendants claiming they have little fuel left for the day.

READ ALSO: Fuel Prices Up in Latest ERC Review with the Common Man Still on the Receiving End

According to a spot check done by The Star, an attendant from Shell outlet in Westlands said that they have limited stock of unleaded petrol.

“We expect no more supply until new prices are announced tomorrow (today). We, however, have plenty of Shell V-Power. No unusual demand from motorists yet,’’ the attendant noted.

The global prices are increasing at an alarming rate and oil traders are feeling the pinch. Some retailers are claiming that selling at the current rates wouldn’t make any sense.

Nevertheless, the Energy and Petroleum Regulatory Authority (EPRA) has dismissed concerns of fuel shortage across the country claiming that there are no hoarding cases.

EPRA also notes that the new rates spread through social media are false and that consumers should await the official rates that will be announced later on May 14.

In the last review, Super petrol, diesel, and kerosene were increased by 5.25, 5.52, and 2.76 shillings, respectively with the regulator citing high import cost.

READ: Tough Times Ahead As Fuel Prices Spike in New Review

The US earlier in May placed sanctions on Iran oil claiming that the country was using the fuel to fund an Islamic terrorist organization, Strait of Hormuz.

The move compelled Turkey, India, Russia, China, and Japan – the net importers of Iran Oil – to seek alternative markets suffocating the global demand.

Meanwhile, the head of analytics at Interfax Energy in London Abhishek Kumar told Reuters that rising geopolitical tensions in the Middle East, together with sharply declining oil supplies from Venezuela and Iran, will remain bullish for prices.

Source: The Star