abbychumz
Senior Lister
Motorists are now paying up to 300 shillings for a liter of petrol in various parts of the country, including Kakamega, Kisumu, and Eldoret. The countrywide shortage of fuel has now entered the third week. In Nairobi, most filling stations were either closed or had long queues on Monday as people tried to fill up. Along Thika Road stations can only offer V-Power, which is more expensive than super petrol and is running out already. On Mombasa Road, some stations restricted motorists to no more than 2,000 shillings worth of fuel. This is despite the government’s assurance that there are sufficient petroleum products in the country. Kenyans were hopeful that the crisis would end by last week following the payment of 8.2 billion to oil marketers as part of the 13 billion shillings outstanding arrears owed to them. However, the situation seems to be worsening every day.
With the Energy and Petroleum Regulatory Authority (EPRA) expected to carry out its monthly price review on Thursday, there are speculations that the prices will go up. This, as many have put it, has made the oil dealers hoard the commodity to sell it at higher prices after the review. On the other hand, the oil dealers have linked the shortage to a lack of clarity on the fuel subsidy that the State introduced in April 2021 to stabilize prices amid suspicion of hoarding. They also claim that the delay in payment of the subsidy has pushed up prices in the wholesale market, where they sell the commodity to the small independent retailers that control 40 percent of the market.
The costly prices have made the small retailers hesitant to buy the fuel, thus making the oil marketers unable to handle the deficit. According to the oil marketers, they had to be cautious about whether the government will compensate them to fuel not used to calculate the monthly price adjustments that will take effect on 15th April, 2022. “There is growing hesitancy to take out all your stocks to the market. What if the government decides to retain prices, yet the stocks you sell were shipped in at higher costs? We are talking of monumental losses,” the CEO of a top oil marketer said. The sharp rise of fuel prices in the global market amidst the ongoing Russia Ukraine war has also triggered an increase in commodities such as crude oil. It has affected the government’s subsidy scheme, according to the government. This pushed the energy regulator to increase diesel and petrol prices by 5 shillings a liter to 115.60 and 134.72 shillings. A liter of super petrol would have increased to 155.11 shillings, while diesel would have retailed at 143.16 shillings a liter without the subsidy.
