Trade row leaves oil dealers in crisis

Independent fuel distributors have raised the alarm over their inability to access petroleum products.

Kenya Independent Petroleum Distributors Association (Kipeda) has written to the Energy Regulatory Commission noting that they were being run out of business due to unscrupulous practices.

But Petroleum PS Andrew Kamau said the government could not be blamed since it did its part.

DISTRIBUTORS

Kipeda draws its membership from distributors and petrol station owners who are not affiliated to the multinationals. It is estimated that they control 55 per cent of the market and members are found even in remote towns where multinationals have not opened their branches.

“In the last month or so, what we have experienced is a clear indication that we are very vulnerable and on the verge of getting completely pushed out of business. For a month now, we do not have any access to supplies whatsoever from any of the major oil marketing companies (OMC),” reads the Kipeda letter to ERC, signed by chairman Joseph Karanja.

“These OMCs only service their branded stations and if lucky, you may access their products at their retail stations at the pump prices as given by ERC. You will then transport the same to your outlet and sell at the same controlled rates.”

DEPLETED STOCKS

A spot check by the Nation indicated that the majority of the stations reported depleted stocks of the precious commodity.

Last year, Kipeda entered into a partnership with a private firm based in Dubai where they bid through the open tender system to import fuel into the country. Sources indicated that when they won the tender, the private firm reneged on the agreement, thereby exposing Kipeda members.

The association has now asked ERC to intervene as they are forced to seek fuel products from multinationals who are not keen to sell them at wholesale prices.

“We are very frustrated with nowhere to run to. We feel that ERC has ignored the plight of independent dealers who it has licensed, or it has been unable to execute its mandate in regulating the petroleum sector,” states Mr Karanja.

PROBLEMS

PS Kamau, however, said the issue was between Kipeda and their partners and the government had nothing to do with it.

“We gave Kipeda a licence to import their products so that they don’t get into such problems. We gave them all the support in terms of registrations, they need to get into contract with people they can work with. If the agreement goes sour, it surely can’t be blamed on the government,” he said.

Mr Fred Suke, who has stations in Kibwezi and Loitoktok, said in the past one month he had not made any profit.

RETAIL PRICE

“Only branded petrol stations are getting fuel. We are only getting it at the retail price. If you factor in transport, we realise we are making losses. There seems to be conspiracy to kick us out of the market and favour the multinationals,” said Mr Suke.

Joseph Mwangi, who has petrol stations in Huruma and Dagoretti, Nairobi, said ERC was not doing its work.

“There seems to be a conspiracy to frustrate us. It’s like they are holding fuel and hiking the prices. We have not been making profits at all,” he said.