Page 7 - DMEA Week 12 2023

DMEA POLICY & SECURITY DMEA

Kenya’s decision to

nationalise fuel imports gets

support from small dealers

KENYA SMALL oil marketers in Kenya have hailed a economy.
decision by the government to nationalise fuel Under the United Energy Petroleum Asso-
imports, a move they contend will end exploita- ciation (UNEPEA), the small dealers now want
tion by big players and enable them to expand the Energy and Petroleum Regulatory Authority
their market presence. (Epra) to introduce a wholesale price to protect
Just days after Kenya announced the opera- them from exploitation by the large OMCs.
tionalisation of a government-to-government Specifically, UNEPEA is pushing Epra to
fuel importation ostensibly to arrest a worsen- strictly adhere to the formula of calculating
ing foreign exchange reserve crisis, the small wholesale prices for various fuel products that is
oil marketers reckon the plan will also help the enshrined in law, meaning the industry regulator
East African nation guarantee a steady supply must set wholesale prices in line with retail prices
of petroleum products while also levelling the that are announced every mid-month.
playing field. “When the prices are announced on the 14th,
In early March, the Kenyan government con- there is the wholesale cap which has never been
tracted Saudi Aramco, Emirates National Oil enforced. We buy the products at near retail
Company (ENOC) and Abu Dhabi National Oil prices and end up with very small margins,
Company (Adnoc) to supply petroleum prod- making business untenable because we operate
ucts over the next six months to ease the pressure at huge losses. This has forced some of us to close
on dwindling reserves. shop,” Irene Kimathi, UNEPEA chairperson was
The downstream petroleum market in Kenya quoted by media outlet The Nation.
is largely skewed in favour of big oil marketing She added that in an environment where
companies (OMCs) that until the nationalisation there are few importers, there is no competition,
of imports were also the main importers through something that leaves the small marketers at the
the open tender system (OTS). mercy of a few wholesalers.
Data by the Petroleum Institute of East Big oil marketers are opposed to the govern-
Africa shows that four oil majors in Kenya (Vivo ment’s deal with the state-owned Arab compa-
Energy, TotalEnergies, Rubis and Ola Energy) nies and have moved to court on the basis that
dominate the downstream petroleum market it breaches the OTS where marketers competi-
with a combined share of 62.47% with huge pres- tively bid to import products and that there was
ence in cities and major highways where demand no public participation and stakeholder consul-
for super and diesel is traditionally high. tation before the gazettement of the Petroleum
The small dealers, who largely depend on (Importation) Regulations, 2023, which is a
the oil majors for supplies of their super, diesel breach of the constitution.™
and kerosene needs, mainly supply the rural
Tanzania starts licensing companies to

build compressed natural gas filing stations

TANZANIA TANZANIA Petroleum Development Corpo- station and distribute it to other areas.
ration (TPDC) has licensed 20 companies to Hudson said within the set timeframe of two
build Compressed Natural Gas (CNG) stations years, the corporation plans to build a CNG
that will also have workshops to convert petrol mother station at Mlimani City that will enable
vehicles, The Citizen reports. large vehicles to pick up gas and distribute it to
Wellington Hudson, TPDC’s oil and gas various regions where infrastructure has not yet
director, said some licensed companies are been reached.
owned by locals while others are joint ventures Other stations will be constructed in Baga-
involving local and foreign investors. Each CNG moyo by Turky Petroleum, two at Mkuranga by
station will be able to fill six vehicles at once Anric Company and Dangote, and Goba by BQ
and enhance six lorries to pick up gas from the Company, according to The Citizen.™

Week 12 23•March•2023 www. NEWSBASE .com P7