ERC cancels distributor’s fuel licence over ‘sabotage’

September 6, 2018 (3 weeks ago) 8:35 am
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In a statement Wednesday evening, ERC cited Section 85 of the Energy Act of 2006 in revoking the licence held by Kipeda Holdings Limited/CFM NEWS

, NAIROBI, Kenya, Sep 6 – The Energy Regulatory Commission (ERC) has cancelled a licence issued to Kenya Independent Petroleum Distributors Association (KIPEDA) Holdings Limited, an entity responsible for the wholesale of petroleum products in the country, citing economic sabotage.

According to ERC, the firm was behind an elaborate intimidation scheme that has seen fuel transporters stage a strike over the implementation of a 16 per cent Value Added Tax (VAT) on petroleum products, a strike which has triggered fuel shortages in Nairobi and Mombasa.

In a statement Wednesday evening, ERC cited Section 85 of the Energy Act (2006) in revoking the licence held by KIPEDA Holdings Limited.

“The Commission wishes to inform members of the public that the action by KIPEDA Holdings Limited amounts to economic sabotage and hereby cancels the licence of the said licensee pursuant to Section 85 of the Energy Act No. 12 of 2006,” ERC stated.

“KIPEDA Holdings Limited is therefore no longer licenced to carry out import, export and wholesale of petroleum products,” ERC announced.

The move came on a day traffic snarl-ups were witnessed at filling stations across the city as outlets stopped restocking petroleum products over speculation on the signing into law of the Finance Bill of 2018 which seeks to further suspend the 16 per cent VAT for two years.

Kiprono Sang, a Customer Service Attendant at a Shell station along Kenyatta Avenue had told Capital FM News fuel shortage was looming with the filling station having run out of petrol by midday.

“The reason you can see this queue is that we’re actually running out of fuel. Diesel is currently selling at Sh115 from Sh102; petrol has risen to Sh127 from Sh113. In the next two hours we’ll only be selling diesel which again could run out by the end of the day,” Sang said.

Atieno Okudo who had queued at the fuel station waiting to refuel her car expressed concern over the looming crisis saying the tax charge on petroleum products was ill-timed.

According to Okudo, fuel dealers could also be hoarding the product in order to take advantage of desperate motorists.

“I’m concerned that I have to queue for so long because I am late for a meeting. The trouble about this country is that people always want to cash in on some of these situations,” she said.

Enoch Wambua, a Public Service Vehicle driver who had also queued for fuel told Capital FM News getting the product had become increasingly difficult.

“The fuel stations are telling us they cannot restock before they know whether the current VAT will be scrapped or not. I have been looking for this product since morning and as you can see, I have to queue before I get petrol here,” Wambua lamented.

The 16 per cent VAT on petroleum products became effective on Saturday.

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