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Fuel Shortage: EPRA Cracks Whip On Oil Companies

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The Energy and Petroleum Regulatory Authority (EPRA) has announced a punishment on oil marketers who have been responsible for the fuel shortage crisis across the country.

EPRA CEO Daniel Kiptoo in a statement copied to Energy CS Monica Juma complained that some of the oil marketers have been exporting more fuel than the stipulated amount, a move that has left local markets to suffer from intermittent supplies.

Kiptoo added that their actions, upon the authority going through data as far as four weeks, were deemed in violation of the law.

A car being fuelled at a petrol station. /FILE

“The EPRA has analyzed the daily petroleum loadings over the past 4 weeks and noted that a number of Oil Marketing Companies (OMCs) have in the period under review given priority to export loadings while the local market was left to suffer intermittent supply,” read the letter in part.

The authority as a consequence announced sanctions on the affected oil marketers, which include the cutting down of storage capacities for the major oil companies that sold most of their fuel to neighbouring countries, for the next three months.

It would mean that their profits would be negatively affected, and reduced by a certain percentage.

As for the local marketers, their compliance has earned them increased storage capacities to allow them to sell more fuel and rake in more money.

“EPRA hereby recommends that in the allocation capacity for the next three cycles, there will be a reduction of capacity share for all oil marketing companies that increased their transit volumes over and above their normal quota during the supply crisis period.

“A corresponding increase of capacity share to all oil marketing companies whose local volume sales increased above their normal quota during the same period,” Kiptoo added.

EPRA did not however reveal the identities of the sanctioned oil companies, nor did they disclose the marketers likely to benefit from selling most of their fuel to the Kenyan market.

The fuel shortage crisis was thought to be over when 100 million litres of Super Petrol arrived in the country. However, spot checks as of Monday, April 11 across some petrol stations revealed long queues of motorists to fuel from petrol stations, a situation that affected several of them in rural towns across the country.

While the government has been blaming the giant oil marketers for the current shortage, the dealers have linked it to a lack of clarity on the fuel subsidy introduced to maintain the fuel prices amid suspicion of hoarding.

Delays in the payment of subsidies to the companies by the government have pushed up prices in the wholesale market where oil majors resell fuel to the smaller independent fuel retailers, who control 40 per cent of the market. This has seen the small retailers hesitate to buy the costly fuel, with an increased supply of oil majors unable to plug the deficit.

The oil majors have also been cautious to increase supply, uncertain about whether the government would compensate them for fuel not used to calculate the monthly price adjustments, which take effect on Friday, April 15 and will last for one month.

Cars queue for fuel at a petrol station along Thika Road on April 11, 2022. /MARVIN CHEGE.VIRALTEAKE

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Marvin Chege
About author: Digital journalist and managing director with a passion for writing captivating stories. Marvin is a young scribe, a social media, sports, gaming junkie and realist who specialises in viral news, multimedia and investigative storytelling.

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