Kenya has enough fuel stocks, State assures

May 3, 2011 12:00 am

, NAIROBI, Kenya, May 3 – The government has assured the public that there is enough fuel in depots, despite a crippling shortage at the pumps on Tuesday.

Motorists in Nairobi have been experiencing a petrol shortage since Sunday but Energy Permanent Secretary Patrick Nyoike said there was approximately 17.3 million litres of fuel products at the Kenya Pipeline Company depots.

"In the depots there were 19.4 million litres and what was being received was 17.3 million. Consumption is about three million litres per day so you can see that we have a lot of fuel," the PS told Capital Business.

The PS\’s assertion was confirmed by the Kenya Pipeline Company which said there were enough stocks in the country.

He went on to explain that storage facilities in Mombasa were full and a vessel that was discharging super petrol on Thursday was forced to leave the berth after offloading only 30 metric tonnes as the tanks could not take any more products.

Speculation has been rife that the oil marketers are hoarding the product in anticipation of selling it at a higher price than the Sh111.17 per litre that has been set by the Energy Regulatory Commission (ERC).

Mr Nyoike however reckoned that the stock-outs probably stemmed from the fact that many oil firms did not place their orders on Friday last week to meet demand.

"On Thursday and Friday, they (firms) did not place orders for large quantities. Maybe they are speculating. This morning, I asked for a breakdown on who owns these products because what is happening is terrible.  I wouldn\’t expect us to be experiencing any supply hiccups despite the high prices," he stated.

He said that he would meet with the marketers on Wednesday to determine what the problem is.

According to ERC however, the artificial shortage was purely due to logistical problems.

ERC Director of Petroleum Peter Nduru explained that the problem arose in effecting payments and the finalisation the transaction documents to change custody ownership of the products from the importer to the marketers.

According to the Open Tender System, fuel is imported by one player on behalf of the other firms in the market and after delivery of the products, the marketers access their share after paying the importer.

"We understand that this issue has been resolved today. There is a lot of product in the pipeline and the oil company depots and in our view the situation should be resolved by tomorrow," Mr Nduru said.

Director General Eng Kaburu Mwirichia was however careful not to jump into conclusions adding that accusations of hoarding by the oil marketers hurt them more than they hurt consumers.

"I don\’t read malice because they are in business and they want to sell. When they are not selling they are losing money so there must be some confusion somewhere," he stated adding that as a regulator, they were unable to take action against such marketers.

Efforts by Capital Business to reach several oil firms were unsuccessful but while the government expected that the situation would be resolved by Wednesday, many motorists in Nairobi were queuing in the various petrol stations with remaining stocks to fuel their cars.

The DG spoke when he announced the new pricing structure for kerosene and diesel to reflect the 30 percent and 20 percent reduction on excise tax announced by Finance Minister Uhuru Kenyatta two weeks ago to cushion Kenyans especially those in the low income segment against the high cost of fuel.

Beginning Wednesday, kerosene will now retail at Sh88.73 cents per litre in Nairobi while diesel will be selling at Sh105. 44 cents in line with the legal notice detailing the 20 percent reduction on the commodity.

ERC Director General Kaburu Mwirichia maintained that the price of kerosene would come down further in coming days once Parliament passes a motion to remove of all taxes and levies on the product.

According to the law, Treasury can only waive taxes by up to 30 percent but anything above that must be sanctioned by Parliament.

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