Page 12 - DMEA Week 14 2022

DMEA FUELS DMEA

Kenya fuel subsidy delay triggers shortages

AFRICA KENYA is facing an acute shortage of petroleum The Energy Petroleum Regulatory Authority
products after the government delayed payment (EPRA) said supply chain constraints caused
of a KES13bn ($112.9mn) fuel subsidy to oil by changing dynamics at the global level post
marketing companies (OMCs). coronavirus (COVID -19) were worsened by the
Intermittent supply, especially in western ongoing Russia-Ukraine conflict.
Kenya, reported since March 28, has adversely Global oil product cost increases forced
affected non-franchised (independent) retail Kenya’s government to implement a petroleum
outlets with franchises owned by multinationals stabilisation mechanism to cushion consumers
witnessing spiked demand. Prices for petrol and from high pump prices. “The recent escalation
diesel have risen to an average of KES160 and in international prices has resulted in huge dif-
KES155 per litre, respectively, with long queues ferences between the actual calculated and the
where supplies are available and hiked fares on stabilised pump prices. There have been delays
public transport. Petroleum and Mining Prin- in remitting compensation from the stabilisation
cipal Secretary Andrew Kamau said the inter- fund,” EPRA said in an April 2 press release.
mittent supply of petroleum products was partly Kenya Pipeline Company (KPC) stock posi-
caused by the delay in paying the subsidy. tion on April 2 noon indicated there were over
“The government is set this week to remit 69 mn litres of petrol, 94 mn litres of diesel,13
compensation from the petroleum stabilisation mn litres of kerosene and 23 mn litres of jet fuel
fund,” he said in a telephone interview on April 4. available. “Our global stock holding is adequate
The delay had led to several OMCs holding back to serve the region, with more ships in Mombasa
sales to the local market. queued for discharge,” KPC managing director
Kenya Independent Petroleum Distribu- Macharia Irungu said. He said there are ample
tor Association (KIPENDA) Chairman Jack- stocks of products in KPC’s system throughout
son Karanja said non-franchised outlets were the country to meet demand. Kenya’s coastal
adversely affected. “There was little loading in the Mombasa port handles refined oil products for
morning in depots of multinationals for delivery domestic use, and export to Uganda, Rwanda,
to branded retail stations. Independent dealers in Burundi, northern Tanzania, eastern Congo
western Kenya are badly affected,” he said. (Kinshasa) and South Sudan.™

Tanzanian regulator not

concerned about shortages

AFRICA THE head of Tanzania’s Energy and Water Util- to assure you that there is no possibility of fuel
ities Regulatory Authority (EWURA) sought to scarcity any time soon.”
downplay concerns about the possibility of dis- Chibulunje was responding to questions
ruptions in petroleum product supplies on April raised by members of Tanzania Editors Forum
2, saying that the government is taking steps to (TEF) as to the possibility of whether the war
ensure that the country has enough fuel to meet sparked by Russia’s invasion of Ukraine might
demand. lead to any petroleum product shortages in the
According to Godfrey Chibulunje, the direc- East African country. According to the Tanzania
tor of EWURA, there are currently no reasons Daily News, Deodatus Balile, the chairperson of
for worry about Tanzania’s supply situation. The TEF, urged the government to expand the coun-
country has enough fuel in its storage facilities to try’s fuel storage capacity on April 1, saying that
last for at least one whole month, and these vol- such a measure might mitigate price increases in
umes are being stored in special depots near port the vent of fluctuation on world crude oil mar-
facilities in Dar es Salaam, Mtwara and Tanga, kets. “This might help in the efforts to control
he stated. the regular increase of petrol price that in turn
Meanwhile, he added, several other tankers affects the economy of individuals,” the newspa-
are already heading for Tanzanian ports. Addi- per quoted him as saying.
tionally, he said, Tanzania has ordered several Balile also encouraged Tanzanian authorities
more fuel cargoes from Middle Eastern suppli- to promote alternative fuels – including natural
ers, and these are due to arrive in the near future. gas, which he described as a good alternative for
“Tanzania has petrol reserve which can be petroleum-based motor fuels. “TEF also advises
used for 27 days, [as well as] diesel for up to 19 the government to consider waiving taxes and
days and kerosene for 14 days,” he was quoted levies on equipment used to convert cars from
as saying by the Tanzania Daily News. “This is petroleum to natural gas use,” he commented.™

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