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President warns of fuel exports amid shortages

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President warns of fuel exports amid shortages


fuel shortage

Motorists and bodaboda riders are hijacking for fuel at a Murang’a gas station in March. PHOTO | MARTIN MWAURA | NMG

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Summary

  • President Uhuru Kenyatta has warned of further sanctions against oil marketers who have allocated larger portions of their fuel imports to neighboring countries, leading to outages in the local market.
  • Dealers traditionally allocate 60 percent of their fuel to the local market and reserve 40 percent to neighboring countries, but have since reversed this.
  • Sir. Kenyatta said it was wrong of dealers to push for quick compensation, yet they are deliberately starving the local market for the critical commodity, almost paralyzing transport and businesses.

President Uhuru Kenyatta has warned of further sanctions against oil marketers who have allocated larger portions of their fuel imports to neighboring countries, leading to outages in the local market.

Sir. Kenyatta accused dealers of breaking the traditional fuel allocations, where the local market is supposed to get higher percentage of imported fuel compared to the transit market.

Dealers traditionally allocate 60 percent of their fuel to the local market and reserve 40 percent to neighboring countries, but have since March reversed this allocation and given the 60 percent to the transit market, leading to outages locally.

Allocation of higher shares to the transit market has led to oil marketers violating minimum stock requirements and starving small fuel supply retailers, leading to the shortage that hit Kenya in March.

Sir. Kenyatta said it was wrong of dealers to push for quick compensation, yet they are deliberately starving the local market for the critical commodity, almost paralyzing transport and businesses.

“It’s wrong for some people to take subsidy money, which is obtained through taxing Kenyans, and instead of giving Kenyans fuel, they go to sell it in other countries at a higher price … we keep an eye on you, and we will take a step, ” Mr Kenyatta said Sunday in his Labor Day speech.

Since March, marketers have increased fuel shares for the transit market driven by higher prices, unlike in Kenya, where they have to wait several months to receive compensation from the state.

The warning comes less than a month after the deportation of a CEO of one of the oil marketers, the call of other CEOs of the Directorate of Forensic Investigations and fuel cuts awarded to some dealers, which increased the share of fuel, the regional markets.

State and oil marketers have since March exchanged counter-complaints about the shortage with the government accusing dealers of hoarding fuel, which has prompted the disruptions.

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