ECONOMIC SABOTAGE

Oil marketers grilled over fuel shortage amid calls to prosecute them

The firms are required to maintain minimum stocks of petrol and diesel to last 20 days and 25 days respectively

In Summary
  • The representatives who turned up at the Directorate of Criminal Investigations headquarters were questioned by officials from economic crimes unit for hours.
  • The companies have been blamed for breaching a regulation that demands they keep a minimum level of diesel and petrol stocks.
A business man sells jerrycans to motorists who are queuing for fuel along Kisumu-Nairobi road on April 12, 2022.
A business man sells jerrycans to motorists who are queuing for fuel along Kisumu-Nairobi road on April 12, 2022.
Image: DANIEL OGENDO

At least 10 representatives of oil marketers were Friday grilled over the firms’ role in the current diesel and petrol shortage crisis.

They were summoned by police who are investigating claims of economic sabotage. 

The representatives who turned up at the Directorate of Criminal Investigations headquarters were questioned by officials from economic crimes unit for hours.

Head of investigations John Gachomo refused to comment on the grilling.

But he ushered them to his office and later led them to the economics crimes unit offices.

It is not clear what they told police who are investigating the claims. 

They risk two years in jail or fines of up to Sh2 million. 

The companies have been blamed for breaching a regulation that demands they keep a minimum level of diesel and petrol stocks, causing the countrywide fuel shortage which persisted on Friday despite an assurance of resumption of full supplies. 

The firms are required to maintain minimum stocks of petrol and diesel to last 20 days and 25 days respectively to cushion the country from supply disruptions.

The government blames the shortage on oil marketing companies, accusing them of breaching the rules on minimum stocks and hoarding supplies ahead of Thursday’s monthly price review, which saw pump prices increase by Sh9.90 per litre from midnight.

Officials have termed their actions economic sabotage, which is a capital offence that carries life imprisonment.

The fines and jail term linked to stocks are contained in the Energy (Minimum Operational Stock) Regulations, 2008 and underline the government’s resolve to end the fuel shortage that has persisted for three weeks.

Police are investigating them for more crimes. 

As part of efforts to address the menace, the government announced it had revoked the work permit of Rubi CEO Jean-Christian Bergeron and ordered his deportation on Wednesday to Paris. 

Rubis in a statement Thursday evening however said the CEO travelled to Paris to brief the head office over Kenya’s fuel crisis.

Energy Cabinet Secretary Monica Juma said Bergeron had left the country on Wednesday night but declined to give further details.

“These artificial shortages are not acceptable and will not be tolerated. We will go the whole hog to bring all persons and companies who are in breach of their licensing and operating guidelines to book,” Juma said.

She said the oil marketers committed economic sabotage and threatened the nation’s security by hoarding the fuel.

Frustrated motorists have been staging long queues at filling stations for days due to the biting shortages. Oil companies have blamed the subsidy arrears owed to them by the state for the shortage. 

The subsidy was introduced in April 2022 to stabilise prices amid suspicion of hoarding.

The officials say delays in the payment of subsidies to the companies by the government have pushed up prices in the wholesale market where oil majors resell fuel to the smaller independent fuel retailers, who control 40 per cent of the market.

This has seen the small retailers hesitate to buy the costly fuel, with increased supply of oil majors unable to plug the deficit.

The oil majors were also cautious about increasing supply, uncertain about whether the state would compensate them for fuel not used to calculate every 14th of the month price adjustments, which will stay in place for one month.

The shortage has crippled some transport firms and opened an avenue for some dealers to raise prices above the caps set by the Epra.

In some areas, a litre of petrol was retailing at Sh200 or more. 

The marketers are said to have increased the share of fuel they sell to the neighbouring countries to over 60 per cent from the previous 40 per cent of total imports to ease their cash crunch.

This has further cut supply as the neighbouring countries enjoy normalcy.

 

 

-Edited by SKanyara

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