State-owned Kenya Pipeline Company has introduced a 30 per cent discount on transit oil products in all its Western Kenya depots, a move aimed at capturing more regional fuel market.
Under the new rates, oil marketing companies will now pay a promotional tariff of $ 41.55 (about Sh4,281) per 1, 000 litres from the current $ 59.32 (Sh6,112). The new tariff will be effective next month.
Energy and Petroleum CS Charles Keter has approved the new tariff which is expected to reduce the cost of doing business for oil marketing companies.
Keter said the new tariff will bolster regional business and strength the country’s ties with neighbouring Rwanda, Uganda, Burundi, DRC and South Sudan, among others.
“We welcome the move by KPC to pass on the benefits of its capacity enhancement programme in the Western region to its customers as well as support regional trade by lowering the cost of doing business,” said Keter.
KPC Managing Director Joe Sang said the move will help the state corporation re-capture the lost regional petroleum market share.
“We have lost our market share especially in Rwanda and Burundi. We must get this rightful share back, and this calls for proactive and strategic thinking. We not only want to regain the lost market, but also extend our operation into new frontiers in the region”, said Sang.
KPC has increased its capacity to serve both local and export markets. One of the key investments geared towards increasing product availability in Western Kenya, was the commissioning of the Sinendet - Kisumu parallel pipeline (line 6) in April 2016.
The 10-inch diametre- 122 kilometres pipeline runs parallel to an existing six-inch diametre pipeline from Sinendet to Kisumu (line 3), which has enhanced petroleum product availability in Western Kenya and the region.
The line has increased product flow to Kisumu depot by 350,000 litres per hour from the previous 110,000 litres per hour, KPC said.
“The additional product has enhanced optimisation of tank utilization in Kisumu. The full tank capacity for the port town is now 39 million litres. The annual demand for petroleum products in Western Kenya is 1.1 billion litres whereas the regional demand stands at 3.3 billion litres,” it said in a statement.
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