Oil marketing companies are hoarding petroleum products, which is causing the current shortage being experienced in some parts of the country even as the government warned it would punish the firms.
The marketers are protesting delays by the government to compensate them their margins, which they forego at the pump.
It is, however, on agreement that they're refunded by the National Treasury.
The marketers say they have not been paid about Sh32 billion, a figure that the Ministry of Petroleum and Mining disputes saying it is Sh13 billion that is outstanding. This is not the first time that the marketers have protested the delays.
The Energy and Petroleum Regulatory Authority (Epra) on Saturday admitted that the “recent escalation in international prices has resulted in huge differences between the actual calculated and the stabilized pump prices”.
“There have been delays in remitting compensation from the stabilisation fund and this has resulted in a number of Oil Marketing Companies (OMCs) holding back sales to the local market," said the regulator, adding that government would settle all the pending claims but also warned them that hoarding is an offence and they risked being penalised.
"All OMCs are therefore directed to immediately release petroleum supplies in order to alleviate the current supply crises.”
Regions such as North Rift and Western Kenyan have been badly affected by the situation in which the major oil marketers have declined to sell products to independent marketers.
However, Kenya Pipeline company said there are adequate fuel stocks and ruled out the possibility of a shortage.
“Kenya Pipeline Company would like to confirm that there are ample stocks of petroleum products in our system throughout the country to meet demand,” KPC Managing Director Macharia Irungu said on Saturday.
Andrew Kamau, Principal Secretary, Ministry of Petroleum, said on Sunday that the inadequate stocks at petrol stations is due to panic buying as motorists react to news of shortages. “This is a run on the stations. Supply is not the issue, it’s panic buying,” Kamau said. “It will go back to normal by Wednesday.”