Motorists Cross Borders To Seek Fuel As Shortage Hits Major Towns

Kenya is in the middle of a fuel crisis due to delays in payments of subsidies by the government. An acute shortage of the commodity that started in Eldoret and Kericho has now hit Nairobi, the North Rift, and North Western and Western regions.

Motorists from Western Kenya have been forced to drive across the border to Uganda to get the much-needed commodity.

The situation has been linked to the reduced imports by big oil marketing companies – who are wary that they may not be promptly compensated for the government-subsidized prices they charge consumers.

The major oil marketing companies who import fuel into the country have been accused of deliberately hoarding the commodity after the Treasury failed to pay for fuel subsidies for four months in a row, an accumulation of 13 billion shillings.

However, for the Oil marketers, the delay means that they have to either dip into their pockets and use their cash reserves or go for loans to restock their fuel, which is not possible in the current economic turmoil.

This comes even as the landed cost of the products continues to rise, leaving oil marketing firms in an even deeper problem.

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In February, the landed cost of petrol rose by 13.4 percent to 77,717.88 shillings, while diesel rose 11.74 percent to 77,822.44 shillings per cubic meter. The price of kerosene increased the highest by 15.9 percent to 71,188.15 shillings.

Furthermore, independent dealers purchase stocks through the prominent oil marketers now prioritize their franchised outlets after reducing imports.

As a result, the independent dealers who supply rural areas, where big oil marketing firms don’t have extensive networks of dealers, have run out of stock.

However, the country’s energy regulator has attributed the shortage to logistical challenges and says it is engaging oil marketing firms to resolve the crisis.

In its February fuel price review, the Energy and Petroleum Regulatory Authority saved motorists from paying about .20 shillings more on a liter of petrol due to the state subsidy that kept pump prices unchanged for the fourth month.

Without the subsidy, consumers would have paid 133.89 for a liter of diesel, 144.25 shillings for a liter of petrol, and 119.42 shillings for kerosene.

The shortage has also been attributed to the high crude prices in the global market, which has rendered stocks unaffordable for some companies.

Due to the Russia-Ukraine conflict, global crude prices have been climbing following tight supplies, with marketers warning of higher prices in subsequent price reviews.

On Wednesday, oil prices jumped by more than 459.74 shillings to 1,311.98 shillings a barrel on supply tightness and speculations of new Western sanctions against Russia.

Apart from fuel, Kenyans are also dealing with drought and high food prices, including essential commodities such as bread, milk, cooking oil, and eggs.