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Independent oil dealers want steady supplies

By Wainaina Wambu | November 1st 2020 at 00:00:00 GMT +0300

Kenya Independent Petroleum Distributors Association (KIPEDA) Chairman Joseph Karanja.

Independent fuel dealers have begun the search for a sole supplier of oil products.

This, they hope, will cure the headache of procuring key products such as petrol, diesel and kerosene.

Kenya Independent Petroleum Distributors Association Chairman Joseph Karanja said they rely on multi-nationals who sometimes refuse to offload products to resellers.

He said it had become tough to the point that they had to look around for oil marketers in need of quick cash so they could get the products.

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“If we had a committed supplier who brings us all the products, our businesses would run smoothly,” he told Weekend Business.

There are over 800 independent oil marketers in the country, controlling about half of the market share.

Mr Karanja (pictured) said if a petrol station belonging to a multi-national wants supplies it calls the head office and can get all the products at a go.

Independent dealers, on the other hand, have to get the products from various sources.

“We are constantly told they will only sell the excess of the oil product they have,” he said.

They also have to raise huge amounts of money first as the trucks entering the depot are categorised, with some of less than 10,000 litres barred from entry.

Unless with financing, the dealers have to sell one product first so as to raise the money for the others.

On fuel fluctuations, Karanja blamed inefficiencies such as spillage and overdue storage that had to be considered in the fuel pricing formula, pushing the cost to taxpayers. 

“The formula may be there but when you let things loose, the cost increases,” he said.

“This is one area that should be addressed because the consumers end up paying a lot more than what they should have paid.”

He said independent dealers want a seat at the policymaking table, claiming that the rules seem to favour and are designed for multinationals. 

“Policies were informed by the multinationals who wanted a window to cover their losses,” he said.

The journey to being an independent fuel dealer is fraught with challenges owing to the capital-intensive nature of the business, thus the thriving of multinationals.

Karanja said an independent dealer has a difficult list of requirements including 13 licences and restrictive policies.

Joseph Karanja Kenya Independent Petroleum Distributors Association
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