Energy sector players urge supply chain policy change

Man Lin Man tanker ship docks at Mombasa Port with 100,000 metric tons of Diesel . The fuel is from United Arab Emirates. May 11 2023.[Omondi Onyango,Standard] Stakeholders in the energy and oil industry are calling for the establishment of consistent policies and dependable supply chains. They believe that such measures are essential for ensuring that consumers can fully benefit from them. They say the Government-to-Government (G2G) fuel import deal has already brought relief to Kenyans by easing pressure on the US dollar, stabilising the Kenyan shilling, and helping drive down pump prices. According to Thayu Kamau, the director of Astrol Petroleum, the G2G arrangement has not only ensured sufficient fuel supplies but has also shielded the country from sudden shortages, maintaining the backbone of economic stability. "Fuel is at the heart of every sector," Thayu explains. "With the shilling gaining ground, transportation and production costs are softening, which is good news for mwananchi, the ordinary Kenyan. But we need consistent policy and supply stability for the benefits to fully reach consumers," he said. Mr Thayu also pointed to recent industry challenges, particularly the integration of Kenya Pipeline Company's (KPC) SAP system with Kenya Revenue Authority's (KRA) iCMS platform. "This integration is meant to improve efficiency and accountability in the supply chain," he noted. "But during implementation, we've seen delays in product clearance, slow system support, and new bottlenecks." Inventory controls These system slowdowns have, at times, disrupted fuel procurement and threatened stockouts, especially at smaller stations. Furthermore, stricter inventory controls now require marketers to replenish stocks before drawing new fuel from KPC depots, a move that improves accountability but adds operational pressure during system hiccups. While global crude oil prices have been fluctuating, and in some cases falling, Mr Thayu cautioned that local consumers should not expect immediate relief at the pump. "The government is steadily scaling back fuel subsidies," he said. "In the past, subsidies cushioned mwananchi from price shocks, but now, fluctuations in global prices are directly passed to the local market. That's why even when global prices ease, pump prices here remain stubbornly high." The Energy Petroleum and Regulatory Authority has emphasised that as long as Kenya relies entirely on imported fuel, the country will remain exposed to the global oil market's swings - a structural issue that continues to challenge both consumers and businesses. Astrol also announced its upcoming entry into the liquefied petroleum gas (LPG) market under the Astrol Gas brand, promising clean, efficient energy solutions for homes and businesses.

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Energy sector players urge supply chain policy change

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