SHORTAGE

Fuel crisis despite oil marketers receiving subsidy arrears

There is a cute shortage of the commodity in several towns outside Nairobi, with long queues witnessed in Naivasha, Kakamega, Machakos and Bungoma

In Summary

•In Kanduyi, Bungoma county, lines of cars stretched for blocks down main roadways on Monday as only one of the area’s five or so filling station had fuel.

•More than half of Kakamega town service stations lacked gas over the weekend.

Motorists await for fuel at a petrol station in Bungoma
FUEL SHORTAGE Motorists await for fuel at a petrol station in Bungoma
Image: JOHN NALIANYA

Even though the fuel supply has slightly returned to normalcy in Nairobi and Mombasa, motorists in other counties are still feeling the pinch for close to two weeks now.

Closed down fueling stations and increased demand has pushed oil prices above Sh300 in Siaya, Kakamega, Kisumu, Kilifi and other highly populated counties.

In Kanduyi, Bungoma county, lines of cars stretched for blocks down main roadways on Monday as only one of the area’s five filling stations had fuel.

More than half of Kakamega town service stations lacked the rare commodity, forcing motorists to travel as far as Eldoret. 

A spot check by the Star in the larger Nyanza area noted only a single station having fuel between Siaya town and Kisumu City. 

The ongoing fuel shortage was anticipated to end last week when President Uhuru Kenyatta cleared Sh34 billion payments to oil marketers for their subsidy arrears.

The oil marketing Companies were expected to receive the payments by Tuesday last week, according to Petroleum  Principal Secretary Andrew Kamau.

Even so, major players in the oil sector are said to be still hoarding new stocks, anticipating a price increase in this week’s monthly price review.

This will be pegged on global crude that has averaged between $110 and $103 per barrel in the past two weeks.

According to the latest monthly price review by the Energy and Petroleum Regulatory Authority, a litre of super petrol retails at Sh134.72 in Nairobi, up from Sh129.72. Diesel sells for Sh115.60, up from Sh110.60. 

The price of kerosene mostly used by rural and urban families for cooking and lighting has been retained at Sh103.54 per litre.

Ps Kamau last week said investigations into the shortage were being finalised, setting the stage for financial penalties and licence withdrawals.

The scarcity has left consumers hunting for fill-ups as officialS warn fuel dealers of dire consequences for hoarding

Independent dealers said they are yet to access the petroleum products as major players ration the little stock they have for their own franchisees.

Many people had expected the National Treasury to review the high tax regime on petroleum products in President Uhuru’s final budget proposal presented in Parliament last week.

The majority wanted a review on the Value Added Tax on fuel and gas introduced in the last two financial years.

Currently, tax accounts for 52 per cent of the total value of a litre of super petrol, with the eight per cent VAT imposed in 2019-20 taking the lion’s share.

High fuel prices affect almost all other products as manufacturers pass on production and transport costs to end consumers.

Last week, Treasury Cabinet Secretary Ukur Yatani promised that the government will continue to cushion consumers till the end of June. He also spared a 10 per cent excise duty hike on petroleum products in his 2022/23 budget plan.