Pedestrians walk past a Kobil service station with the prices display of petrol (US $ 0.84 per litre unleaded) and diesel (US $ 0.72 per litre) on a signage in Kenya’s capital Nairobi, February 7, 2016. The global oil price is hovering at about $30 U.S. dollars a barrel. REUTERS/Thomas Mukoya Oil marketers have made an attempt to manoeuvre existing marketing rules to retain higher fuel costs to Kenyans this month, denying relief to consumers.
In a letter to Petroleum Cabinet Secretary John Munyes, the marketers want the ministry to force the Energy and Petroleum Regulatory Authority (EPRA) to factor in costs related to unsold fuel stocks procured when global prices were higher in the next price review.
“We therefore request your good office to engage EPRA to come up with a mechanism to compensate oil marketing companies (OMCs) on the current exposure pegged on the drop in demand for both premium motor spirit (petrol) and automotive gas oil (diesel) in April 2020,” the marketers note in a letter undersigned by the Chairman of the supply coordination committee and KenolKobil General Manager Martin Kimani.
The marketers want EPRA to consider and adjustment cost of 40 percent of unsold cargoes during the next review set for Thursday even as they fail to mention the size of unsold stocks.
Further, the operators are lobbying for EPRA to be required to exclude two April priced cargoes from the review to allow them to sell off their expensive inventory and any other measure to cushion them from the price exposure.
In essence, the marketers want the government cover them from losses incurred from the fall in global oil prices.
According to Charles Wanguhu, a social activist and coordinator of the Kenya Civil Society Platform on Oil and Gas, such a move would be illegal.
“What oil marketers are seeking is to have the government ensure they make a profit from the unsold stocks of oil. This would have a knock on effect on everything and would be a disservice to consumers,” he said.
Should the oil marketers have their way, Kenyans will pay more for fuel from Thursday even as they are ought to enjoy a lower price as mirrored in the falling global prices.
The Ministry of Petroleum has nevertheless said it has dismissed the lobby from marketers insisting new prices will be set according to the law.
“Prices in Kenya are controlled by a legal notice. EPRA has to conform to […]