KCB Injects Ksh120b To Cushion Oil Companies, Ease Fuel Prices

KCB Bank Kenya has injected over 120 billion Shillings to support Oil Marketing Companies (OMCs) importing fuel into the country after the government slashed subsidies on the commodity.

According to KCB Group, the move is aimed at facilitating oil importation into the country by financing the oil firms under its portfolio that have won business under the Open Tender System (OTS) through the Ministry of Petroleum and Mining.

The subsidy withdrawal by president Ruto’s government has seen a liter of petrol jump to 179.30 shillings and 176 shillings in Nairobi and Mombasa respectively, an increase of 20 shillings per liter from the last review on August 14 when the commodity cost 159.12 shillings.

Meanwhile, a liter of diesel is now retailing at 165 shillings from 140 shillings, while a liter of kerosene is retailing at 147. 94 shillings up from 127.94 in August 2022 in Nairobi. Fuel subsidies have been partially retained for diesel and kerosene at 20.82 and 26.25 shillings respectively, according to the Energy and Petroleum Regulatory Authority (EPRA).

In a statement on Monday, the KCB group noted that the price of fuel in the country is expected to surge in the coming days, adding that it is seeking to consolidate its support to the energy sector. The bank noted that the fund will play a critical role in the stabilization of fuel prices in a short time.

Under the OTS system, the winning oil marketer imports the fuels on behalf of the other firms using the confirmed allocations. The other oil marketers are on the other hand mandated to offtake their volumes upon arrival.

According to CEO Paul Russo, the importation of petroleum products through OTS allows marketing companies to access petroleum products at the same price and therefore levels competition in the petroleum market.

The latest price hike is the largest since the implementation of the fuel subsidy program in the March 15-April 14 pricing cycle in 2021.

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