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September 23, 2018

Fresh crackdown on illegal petrol stations to kick off from Saturday

Energy Regulatory Commission Acting Director General Pavel Robert Oimeke during the release of the maximum petroleum products' retail pump prices in Kenya for the period 15 June - 14 July  2017
Energy Regulatory Commission Acting Director General Pavel Robert Oimeke during the release of the maximum petroleum products' retail pump prices in Kenya for the period 15 June - 14 July 2017

Petrol stations flouting laid down regulations have 90 days from September 1 to put their house in order or be shut down, the Energy Regulatory Commission has announced.

The regulator said the move is a continuation on the fight against fuel adulteration.

“Non-compliant stations that do not undertake corrective actions within 90 days from September 1 will be shut down,” ERC director general Pavel Oimeke told the Star.

Among the documents needed from the operators include a valid permit from the respective county government, and a valid pump calibration certificates from the department of weights and measures.

Others are a valid certificate of registration as a workplace from the directorate of occupational safety and health services, and evidence of submission of an Environmental audit to NEMA within the last one year period.

Currently, there are 2700 petrol Station in Kenyan. While it is not clear how many of the stations will be closed in the fresh crackdown, the watchdog has this year alone closed and blacklisted over 100 stations across the country.

According to the Petroleum Institute of East Africa, illegal trade in petroleum products denies the government Sh34 billion annually in revenue.

PIEA also notes that up to 75 per cent of the 33 million litres of kerosene reported to be used monthly goes into adulterating diesel and petrol. Only five million litres is used for lighting and cooking.

The consumption of diesel tops the petroleum chart with 210 million liters used a month by Kenya whereas super petrol has a usage of 140 million liters a month. 

In addition, it deals with an average of seven cases of fuel adulteration every month, with most of them coming from Mt. Kenya , Western and Rift Valley regions. 

While the crackdown is looming, the regulator is also pushing for Policy change where Kerosene taxes will be increased to be the same level as diesel. The aim is to remove the incentive for adulteration.

 Currently, a litre of petrol retails at Sh113.73. Diesel at Sh102.74 and Kerosene at Sh84.95.

 The prices are expected to go up from September 1 by 16 per cent after the addition of Value Added Tax (VAT) on the products. 

Speaking to the Star, Kenya National Chamber of Commerce chairman Kiprono Kittony said the high fuel cost will have a greater impact on poor households.

 “As a chamber we believe that all is not lost and there is policy space for parliamentarians to ease the burden of rising costs on consumers and to offshoot the effect of VAT on other basic products,” Kittony said.

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