Fuel shortage bites after weekend price cut

January 16, 2012
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, NAIROBI, Kenya, Jan 16 – Nairobi motorists woke up to a fuel shortage at the pump on Monday, which station dealers attributed to the move by the Energy Regulatory Commission (ERC) to review fuel prices downwards.

Oil retailers claimed they had not restocked by Sunday when the new price regime came into effect, for fear of making losses with old stock.

A spot check by Capital News revealed that some stations ran out of fuel as early as 10am in the morning due to what a manager at a KenolKobil station in Athi River blamed on the price cut announced on Saturday.

“We normally order around two trucks, which is 50,000 litres and goes for one week or four days. We had the issue of price changes so we did not purchase a lot because it would have taken us somewhere bad,” he revealed.

On the other hand, stations that had stock witnessed long queues as motorists waited for hours to be served.

However, in most of the outlets operated by independent oil dealers, fuel was in plenty with many attendants explaining that they have had to sell their old stock at the new rate of Sh111 per litre for super petrol.

“The fuel is from Mombasa and comes at a lower price than in Nairobi. We got it at Sh102 a litre adding transport costs of about Sh3.50 and sold it here for Sh107 per litre. So we added Sh2 per litre to the price,” he said.

The oil marketers however assured that the situation would improve by Tuesday as most were expecting fresh deliveries later on Monday.

ERC’s Director-General Kaburu Mwirichia has in the past maintained that the regulator took the decision to give pump price projections to allow consumers to prepare accordingly.

A statement released by Mwirichia on Monday evening attributed the fuel shortage to an unforeseen demand spike over the weekend occasioned by the announcement of the new oil products pricing schedule.

“Investigations by ERC confirm that the fuel shortage is not in any way attributable to market manipulation by oil marketers as earlier alleged in sections of the media. All leading oil marketers have today (Monday) proceeded to lift respective products for onward delivery to their outlets today,” Mwirichia clarified in the statement.

Mwirichia added that ERC management toured a number of fuel depots to assess the situation and was assured of normal service deliveries.

The regulator assured it would “continue to monitor the sector to ensure implementation and the observance of the principles of fair competition.”

The maximum allowed price of super petrol in Nairobi dropped by Sh7.11 per litre, while diesel decreased by Sh3.08 per litre and kerosene reduced by Sh3.63 per litre.

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