Energy secretary Monica Juma has promised motorists that the government will restore the normal supply of petroleum products in all parts of the country within the next 72 hours as Energy and Petroleum Regulatory Authority (Epra) announced price hikes in the April review.
The CS has ordered authorities to allow fuel tankers to move across the country on a privileged basis to stabilise supply in 72 hours while retailers have been urged to operate 24 hours.
Petrol and diesel prices have increased by Sh9.90 to retail at Sh144.62 and Sh125.50 respectively in Nairobi. Kerosene will now retail at sh113.55 which will hit hard on low-income households that rely on it for cooking and lighting.
In her address, Dr Juma blamed oil marketing companies (OMC) for the current shortage being experienced in the country. She said that some marketers have been hoarding their share of fuel speculating higher prices in the Epra’s review.
“It’s regrettable that we’re in this situation which we had hoped would self-correct. Any entity that is not ready to work within the legal framework of Kenya should vacate the market immediately,” the CS said.
The CS said that marketers and independent retailers who have flouted the set guidelines occasioning the shortage would be brought to book.
As punishment, the Ministry of Energy will cut import allocations for oil majors that increased the share sold to neighbouring countries. Marketers who sold more locally will receive more fuel for the next three import cycles.
Dr Juma said to date the government has disbursed Sh34.6 billion to oil companies from the fuel stabilisation fund to keep prices of the commodity down. The state said that Sh14 billion will be paid out to oil marketers by 3 pm Thursday to clear the balance.
Estimates from the oil marketers indicate that fuel prices could increase by up to Sh40 a litre in the absence of a subsidy, pushing the cost of petrol and diesel to Sh174.72 and Sh155.60 respectively in Nairobi — which will be the highest in Kenya’s history.
But the State could offer a partial subsidy similar to last month to ease the jump in fuel prices amid the push by oil dealers to scrap the State’s aid that has been blamed for the fuel shortage that has persisted for the past weeks.
Editor’s note: An earlier version of the story was published before Epra’s monthly review. The story has since been updated to include new petroleum products prices.