May 20, 2024

What Causing Fuel Shortage In Kenya; Crisis To End in Two Days, Government Says

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What Causing Fuel Shortage In Kenya; The Crisis To End in Two Days, Government Says As Queues At Stations Grow Longer.

Queues at filling stations grew longer over the weekend due to fuel shortages in the country.

It has been revealed that delayed payments of subsidies meant to stabilize fuel prices led to gasoline shortages.

The government was yet to pay about 13 billion shillings ($113 million) to oil marketing companies to keep prices from rising further, with the cost of gasoline already at the highest in a decade. 

The government said there is sufficient stock of fuel in the country and attributed the shortage to panic buying after some companies curbed supply last week.

The funds, which will be drawn from the exchequer, are being audited and will be paid “shortly,” Petroleum and Mining Principal Secretary Andrew Kamau said Monday by phone.

What Causing Fuel Shortage In Kenya

Speaking in a TV interview on Sunday, April 3, Petroleum and Mining PS Andrew Kamau said the current fuel shortage will end on Wednesday, April 6.

“This thing is a classic run, it’s the same if all of you go to the bank in order to withdraw, they don’t have the money sitting there. 

 “It’s the same thing with petrol stations, you have to get it from the tank to the petrol station. What has happened is that the high import price is causing some of these small players to incur cash flow issues.

“There have been delays in remitting compensation from the stabilization fund and this has resulted in a number of oil marketing companies holding back sales to the local market,” the Energy and Petroleum Regulatory Authority said on April 2.

The government’s subsidy through its price stabilization fund kept gasoline prices at 129.72 shillings per liter and 110.60 shillings for diesel for five months. 

But last month, authorities were forced to hike prices to a decade-high due to the global rally in oil prices.

A liter of gasoline is now retailing at 134.72 shillings per liter in the capital, Nairobi, and diesel is at 115.60 shillings per liter. Without the cushion, gasoline prices would have jumped to 155.11 shillings on March 15, while diesel would be 143.16 shillings in the capital, according to EPRA.

Though the country is sufficiently stocked, the local supply chain has experienced constraints “due to changing supply dynamics at the international markets post the Covid-19 lock-down period and which has now been worsened by the ongoing Russia-Ukraine conflict,” according to the industry regulator.

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