Kenya Pipeline Company blames ‘dirty’ fuels for shortages

Kenya Pipeline Company has blamed rampant fuel adulteration for the supply shortages around Kisumu and Kakamega towns.

Company chairman John Ngumi told The Standard that oil marketers in the region had placed huge orders for kerosene but had been slow to collect it following a major crackdown by the regulatory body.

Kerosene is cheaper and is therefore widely mixed with petrol to enhance volumes before the mixture, disguised as pure super petrol, is sold at the pump.

“Tanks were filled with Kerosene, meaning the diesel stocks could not move,” Mr Ngumi said, linking the slow collection of diesel and petrol, which clogged the pipeline.

His explanation pointed to improper business dealings among unscrupulous oil marketers who mix paraffin to get more volumes of both petrol and diesel.

Kenya levies the lowest taxes on paraffin, the fuel of choice among the poorest households to cook and light their homes. The low taxation measure is meant to cushion the most vulnerable in society from high energy costs.

Kerosene attracts excise duty of Sh5.75 per litre compared to Sh19.89 per litre of petrol, which is also subject to other taxes including road levy. As a result, petrol prices are almost double the rates for kerosene. The Energy Regulation Commission clamped down 56 filling stations last month after they were found to be retailing motoring petrol mixed with kerosene. Kerosene however burns better than diesel but is slower than petrol.

Ngumi was speaking at a press conference to defend the selection of its new managing director Joe Sang, amid fears that his appointment was influenced by his ethnicity.

“The process was transparent but I appreciate that it is humanly impossible to satisfy everybody,” said the chairman before explaining the process.

A total of 64 applicants responded to the advert announcing the job opening.

A two-step short-listing process, Ngumi said, was done by the Human Recourse sub-committee of the board, which ended up with six finalists. A full board meeting interviewed the short-listed candidates, in a recruitment where each director individually scored the applicants.

He said Sang scored the highest mark and was recommended for appointment by Energy Cabinet Secretary Charles Keter.

KPC also admitted that the construction of the new Nairobi-Mombasa pipeline could extend beyond the September deadline owing to a sustained misunderstanding between the contractor, Zakhem International, and a Chinese consultant.

Procurement of the parts was delayed because consultant had to approve the drawing of every item, whether ‘small as a screw or big as pump station’.