Fuel Supply Crisis Looms As Independent Dealers Threaten To Halt Purchases
Kenyans could soon face fuel shortages at the pump after two associations representing independent petrol station owners said they may stop buying fuel, accusing oil marketing companies of selling above the prices EPRA allows.
In a joint statement on Tuesday, October 27, the Petroleum Outlets Association of Kenya (POAK) and the Kenya Independent Petroleum Dealers Association (KIPEDA) said the standoff could push independent stations across the country out of business.
Their complaint is that OMCs have been charging independent dealers more than the maximum wholesale prices the Energy and Petroleum Regulatory Authority published on October 14. The dealers say they have raised the matter several times with EPRA and the Ministry of Energy, but nothing has changed.
According to them, the problem began on October 15, the day the new prices came into force. Since then, many independent stations have found it nearly impossible to buy fuel at a price that leaves them any margin.
The two bodies have now told their members to stop buying from any supplier whose prices exceed the gazetted wholesale caps, a move that could quickly translate into shortages if no solution is found.
“We advise all independent petroleum operators countrywide to immediately suspend the purchase of petroleum products at rates exceeding the gazetted EPRA wholesale limits,” they said.
They added that “independent stations nationwide are facing critical product stock-outs,” and that owners are being squeezed into a corner: shut down, or keep selling at a heavy loss.
The associations want EPRA and the State Department for Petroleum to act against any OMC found breaking the pricing rules. If they don’t, they warn, more independent outlets will close.
The row comes barely two weeks after EPRA announced steep increases for the October 15 to November 14 cycle, a decision that left many Kenyans angry.
Under those rules, the wholesale cap in Nairobi was set at Ksh211.80 per litre for Super Petrol, Ksh212.60 for diesel and Ksh204.79 for kerosene. The dealers claim some suppliers are ignoring these ceilings.
In that review, Super Petrol went up by Ksh12.93 per litre, diesel by Ksh9.90 and kerosene by Ksh28.49. Pump prices in Nairobi rose to Ksh226.96 for petrol, Ksh227.76 for diesel and Ksh219.87 for kerosene.
The hikes came after the government suspended the price stabilisation mechanism that had been shielding motorists from rising global oil costs. EPRA Director General Edward Mwirigi Kinyua said the money was being kept back to cushion future increases.
With motorists and businesses already feeling the pinch at the pumps, the dealers say that unless the wholesale caps are enforced, fuel distribution across the country could be disrupted.
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