Help me understand

O

Othello

Elder Lister

Huyu jamaa anajaribu kusema nini?
Tofauti ya marketers na petrol stations/franchise ni nini?
And assuming only 7 marketers/brands stations/or whatever he wants to mean, does it mean izo 1200 remaining petrol stations weren't getting subsidies shut down? Or how did they survive without subsidies? Or there were fuel stations selling fuel above the stipulated prices?
 
Othello said:

Huyu jamaa anajaribu kusema nini?
Tofauti ya marketers na petrol stations/franchise ni nini?
And assuming only 7 marketers/brands stations/or whatever he wants to mean, does it mean izo 1200 remaining petrol stations weren't getting subsidies shut down? Or how did they survive without subsidies? Or there were fuel stations selling fuel above the stipulated prices?
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The 7 Marketers are private companies largely owned by both kk and assmio cartels that import refined crude oil. They hire storage tanks at Kenya pipeline through their influence. The 1200 stations Zina buy from the marketers directly or through brokers. The government pays the billions to the marketers to reduce they importation cost and resell fuel cheaper to the 1200
 
Cortedivoire said:
The 7 Marketers are private companies largely owned by both kk and assmio cartels that import refined crude oil. They hire storage tanks at Kenya pipeline through their influence. The 1200 stations Zina buy from the marketers directly or through brokers. The government pays the billions to the marketers to reduce they importation cost and resell fuel cheaper to the 1200
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Do you notice anything wrong with refined crude oil ?
Kama ni mimi nigesema refined petroleum products.

Next.....
 
Othello said:

Huyu jamaa anajaribu kusema nini?
Tofauti ya marketers na petrol stations/franchise ni nini?
And assuming only 7 marketers/brands stations/or whatever he wants to mean, does it mean izo 1200 remaining petrol stations weren't getting subsidies shut down? Or how did they survive without subsidies? Or there were fuel stations selling fuel above the stipulated prices?
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He's only trying to spin but I think there are five companies in the "pool" to bid on who will import in a certain month. I hope you are aware they cannot be allowed to import willy nilly because meli zinaweza kurundikana bandarini without capacity to offload, attracting demurrage that would eventually be passed to consumer. There is also the pipeline capacity and storage at the coast and upcountry to think about.
Hivyo si kila mtu anakimia UAE na gatoome.
 
Okiya said:
Do the 1,200 independent petrol stations have capacity to import fuel for the entire nation?

Do they have enough working capital to survive not being paid by the government for upto 2 months?
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That is where JSKS is heading. Since these marketers have been importing for their stations also. That means they are selling at double the profit on what the independent are getting.
Kwa ground vitu are now the same for both players.
I am expecting Hustler to license more independent importers.
As for the marketers wako sawa. Lack of subsidies will only Cut their profit by half and it doesn't mean they will make a loss. They need to restrategize ama independent importers will take over
Hao marketers watasema petrol is 179 alafu a Somali importer anakua licensed atauza petrol at 90 watatii
 
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Hii maneno ni kama hii kitu , we only see and hear about the tiny fraction.

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Cortedivoire said:
That is where JSKS is heading. Since these marketers have been importing for their stations also. That means they are selling at double the profit on what the independent are getting.
Kwa ground vitu are now the same for both players.
I am expecting Hustler to license more independent importers.
As for the marketers wako sawa. Lack of subsidies will only Cut their profit by half and it doesn't mean they will make a loss. They need to restrategize ama independent importers will take over
Hao marketers watasema petrol is 179 alafu a Somali importer anakua licensed atauza petrol at 90 watatii
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Clearly hujui how mafuta huletwa kenya. Under the open tender system, oil marketers bid to import all the petroleum that Kenya will use for an entire month. The winning bidder then sells the petroleum to other market players at the same price after taxes and other costs have been factored in.

FYI, there are over 100 oil marketers in Kenya. But how many can bring oil for an entire month?
 
Okiya said:
Do the 1,200 independent petrol stations have capacity to import fuel for the entire nation?

Do they have enough working capital to survive not being paid by the government for upto 2 months?
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They facilitate last mile delivery. There is one kasmall one near our rural home that mainly services boda boda. Imagine mtu wa boda boda having to go to Karatina to fuel when he doesn't need to.

Hii OLA ya hapa KU also never has fuel.
 
Some bit of explanation based on conversation I had with a CEO whose company regularly wins tenders to import oil.

Kenya we have an open tender system where companies bid to be given the award to import fuel to Kenya.

Every month Kenya imports about 213 million litres of diesel (AGO), 150 million litres of petrol (PMS) and 39 million litres of kerosene (IK)

So the winning supplier then goes to the market (High seas) to source for fuel. They will usually make margins of cents but because of the huge volumes, the amounts are considerable.

Once the fuel arrives in Kenya, its stored in KPC and it becomes property of government. The company that imported the fuel gets paid

Oil companies then apply to KPC to be allocated the fuel. Allocation is based on capacity to supply the country e.g. number of petrol stations a company has. So you can have a situation where Engen has won the bid to bring fuel to the country but because they have few petrol stations, they get allocated less fuel compared to say Shell or Total.

Some companies fail to get allocation from KPC because they have say very few stations. These companies will thus buy fuel from other oil marketers. e.g. your local unnamed petrol will buy fuel from say Rubis.

Back to KPC. Once the companies (say 10 companies) have been allocated fuel, they will then pay KPC say Kshs 120 per litre and immediately collect their fuel and store it in its tanks pale Industrial area. Note the word immediately is in bold and underlined. At this time EPRA will have done its mathematics and agree that the maximum price to be charged to Mwananchi will be say KShs 160 per litre.

But government comes in and says the price is so high and talks to the 10 companies asking them to sell fuel at KShs 140 per litre and the KShs 20bob per litre government will pay them on behalf of Mwananchi- that's the subsidy.

So question to ask Cherargei and those bringing lots of politics in this fuel thing:

1. In Kenya we have over 100 oil marketing companies (OMC) , how many have the capacity of bringing all those litres of fuel every month? That's like KShs 35 Billion of fuel. Imagine if one OMC won the tender and fails to deliver. What would happen to the country that month?

2. Is it practical to allocate more fuel to companies that have few petrol stations?

Finally, its not the petrol station that gets the subsidy, its the companies that get allocated fuel at KPC.
 
Cortedivoire said:
I am expecting Hustler to license more independent importers.
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Its taken decades for the current system to get where it is, decades of implementing regulatory best practice, and it works. Hakuna kuamka asubuhi moja na kusema wacha Wanjala alete next months cargo
Denis Young said:
They facilitate last mile delivery. There is one kasmall one near our rural home that mainly services boda boda. Imagine mtu wa boda boda having to go to Karatina to fuel when he doesn't need to.

Hii OLA ya hapa KU also never has fuel.
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And EPRA has considered that and those players have a cut from the total price of fuel, to cover their costs and a margin on top
 
Okiya said:
Clearly hujui how mafuta huletwa kenya. Under the open tender system, oil marketers bid to import all the petroleum that Kenya will use for an entire month. The winning bidder then sells the petroleum to other market players at the same price after taxes and other costs have been factored in.

FYI, there are over 100 oil marketers in Kenya. But how many can bring oil for an entire month?
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How come we have a winning bidder but only 7 Marketers including the winning bidder get the lion share?
 
What would happen if the government stopped charging the 16% VAT on fuel as it cuts across all the players and do away with subsidy? ....... Just a layman musing out loudly
 
Ramses said:
What would happen if the government stopped charging the 16% VAT on fuel as it cuts across all the players and do away with subsidy? ....... Just a layman musing out loudly
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That VAT goes to government as revenue. It's a lot of money. They would have to find a very large sector of the economy and tax it to hell to generate the same revenue. Alternatively, they would have to cut government spending.
 
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