Petroleum PS: It is normal for us to delay oil marketers’ money

Petroleum and Mining PS Andrew Kamau [David Njaaga, Standard]

Petroleum and Mining PS Andrew Kamau now says it is normal for government to delay paying oil marketers for at least a month and that this should not trigger fuel shortage.    

Speaking Monday morning on Standard Group’s Spice FM morning show, the PS said the ministry usually requires time to verify the quantity of fuel brought in the country so as to avoid fictitious claims under the ongoing subsidy program.

“The subsidy is always a month late because we have to do the analyses of who is owed what depending on what has been imported. It is nothing new,” said Eng Kamau.  

“Those numbers have to be verified by the Kenya Revenue Authority (KRA). Once that calculation is done, we then present it to Treasury.”

He is now blaming the fuel shortage in the country on panic buying saying that if Kenyans lived “the way they usually live’’ there would be no shortage as is being witnessed in various stations as oil marketers cite liquidity strain over delayed payment by government.  

“This is like a bank run. Most people, their cars have never seen a full tank. All of a sudden their cars are full. They even brought jerry cans to store extra,” said Eng Kamau.

“We are in unusual situation where it is a self-fulfilling prophesy. That there is a [perceived] shortage so we rush and then cause more shortage.”

This even as Eng Kamau said government owes oil marketers between Sh13 billion and Sh15 billion, being almost half the figure that oil firms have been stating.

Oil marketers have said the delays in getting their money from government is putting a strain on their liquidity, leaving some small marketers with limited credit lines unable to restock.

According to Eng Kamau, some stations have ended up exhausting their week’s fuel demand in under six hours, leading to the stock outs that have seen some motorists report that they have had to buy fuel above the maximum allowed prices.

The Energy and Petroleum Regulatory Authority (EPRA) in a circular dated April 2, warned oil marketing companies of sanctions against hoarding petroleum products.

Epra reminded them that hoarding fuel or selling above the published price is against the Petroleum Act 2019.