Oil marketers accused of hoarding fuel stocks

By Macharia Kamau

Independent oil marketers have accused major dealers of hoarding petroleum products in anticipation of the new pricing guide to be issued on Thursday.

The relatively smaller independent dealers buy petroleum products from the larger oil marketers at a wholesale price for redistribution, but now say the majors are shutting them out as they wait to make huge margins. Fuel prices are largely expected to go up when the Energy Regulation Commission issues its monthly price-capping guide on April 14. While the guide sets the maximum retail price that marketers can charge, it does not regulate the wholesale market.

The independents say oil majors have withheld products, and expect to make huge margins on the unregulated wholesale segment when the new prices are announced later this week. Vanesio Kariuki, the vice chairman Independent of the Petroleum Dealers Association said a number of independents had run out of stocks, and could not replenish with major marketers turning them down.

Well supplied

"All the oil majors have refused to sell to us, saying they do not have enough stocks to run their operations and sell to independents... This however does not add up, given the country has been well supplied with products in the last month," he said.

Independent marketers account for 38 per cent of the market share, and Kariuki notes that most of them are either out of stock, or running low.

Retail fuel prices are expected to rise following steady rise in price of crude oil in international market. A barrel of brent crude oil is currently going for $123, up from about $100 in January.

Retail price of petroleum products Kenya has followed happenings in international markets, with prices of petrol going up to Sh102.4 over the last month compared to Sh94.50 on December.