Oil marketers in Kenya under fire over hoarding fuel stocks in anticipation of price increase
Oil Marketing companies (OMCs) are once again on the spot as they now hold back stocks of fuel in anticipation of a price increase in the next maximum pump prices review.
In a statement issued Tuesday, the Energy and Petroleum Regulatory Authority (EPRA) said it has received reports of artificial shortages of fuel supplies particularly in Western Kenya ahead of Sunday’s mid-month review.
“Preliminary investigations indicate that a number of Oil Marketing Companies (OMCs), are deliberately holding back sales to non-franchised petroleum retailers (independents), in anticipation for a price increase.
In essence, the oil marketers are looking to block sales of held fuel to the dealers only to release the stocks after a potential price increase ensuring higher profits on their part.
“This practice is tantamount to hoarding and an offence under Section 99(1) (k) of the Petroleum Act No,2 of 2019,” added EPRA.
EPRA has further warned the oil marketers against the vice which attracts a Ksh.1 million fine, an imprisonment term of not less than one year, or both.
Oil Marketers have not been shy of controversy having been indicted in an attempt to manoeuvre existing regulations to retain high fuel costs to Kenyans in May.
In a letter to Petroleum Cabinet Secretary John Munyes, the marketers wanted the ministry to force the Energy and Petroleum Regulatory Authority (EPRA) to factor in costs related to unsold fuel stocks procured when global prices were higher during the May 14 review.
The move termed as shameful and greedy by the Consumer Federation of Kenya (COFEK) was however mooted by the ministry to see Kenyans mark a relief from prevailing global oil prices.
The marketers had at the time sort to force the Ministry’s hand in covering for losses incurred from falling global process.
Last month, diesel prices dropped sharply by Ksh.19.19 per litre while super petrol costs declined by Ksh.9.54 per litre with only kerosene users missing out on the relief as prices rose by Ksh.2.49 a litre.
Pump prices are however now set to reverse the costs-drop trend as global crude prices stabilize following sharp falls in price across March and April.