Kenya to use reserve fuel to avert crisis

February 18, 2009

, NAIROBI, Kenya, Feb 18 – The Ministry of Energy has authorised the withdrawal of more than 74 million litres of strategic petrol reserves from the Kipevu storage facility to avert a looming fuel shortage.

Capital Business News is in possession of a letter from Energy Permanent Secretary Patrick Nyoike to the Kenya Revenue Authority (KRA), in which he wants oil marketers to be allowed to access their individual dead stock.

In the February 17 letter, Mr Nyoike says delivery of petrol had been delayed after the vessel transporting it to Mombasa was forced to wait for an escort from international navy forces through dangerous Somali waters.

"This situation has caused stock outs of super petrol by some oil companies," Mr Nyoike says in the letter.

"The only immediate solution available is to allow oil marketing companies to access their respective dead stocks of super petrol upon payment of taxes and other fiscal imposts."

The vessel was scheduled to arrive in Mombasa between February 10 and 12, but is now expected to dock on February 20.

KRA approved the withdrawal, but with a strong rider that each company must pay the requisite taxes and levies before it’s allowed to access the petrol.   

"The Authority will only allow access to the line-fill subject to payment of taxes," a response from Wambui Namu, the Commissioner of Customs said.

The country recently went through a shortage of petroleum, occasioned by a breakdown at the Kenya Petroleum Refineries Limited which processes 70 percent of Kenya\’s petroleum products requirement.

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