Fuel crisis: Normalcy to resume in 72 hours, CS Monica Juma says

Mining CS Monica Juma, who is also the Acting Petroleum CS, addressing journalists at Kawi Complex in Nairobi on April 14, 2022. [Brian Okoth, Standard]

Acting Petroleum Cabinet Secretary (CS) Monica Juma projects that the fuel crisis in the country will be resolved within 72 hours from Thursday, April 14.

That takes the projection to Sunday, April 17.

Addressing journalists at Kawi Complex in Nairobi on Thursday, the minister said the fuel crisis in the country has been worsened by the ongoing war in Ukraine and the hike in crude oil prices.

She said the anxiety over fuel is a global concern, and it’s not unique to Kenya.

Juma said her ministry was aware of “growing rumours of the possibility of an increase in the prices of petroleum commodities in the country”.

At the same time, she said she’s been informed that there were reports suggesting that the Government would discontinue the fuel stabilisation programme over its alleged unsustainability.

The minister has, however, allayed these fears, saying the price review won’t shock Kenyans, as the fuel subsidy programme would continue.

The minister accused oil marketing companies of hoarding fuel with the hope of an exponential price hike in today’s (April 14) review by EPRA. She also accused the oil marketers of selling fuel meant for the Kenyan market to the foreign users.

“These actions have created artificial shortages, panic and anxiety,” said CS Juma.

Describing the ongoing fuel crisis as “energy insecurity”, the minister said her department has held several meetings with oil marketing companies to find a solution to the nationwide fuel scarcity.

Unremitted subsidy was the key concern that the oil marketers brought to the CS’s attention.

The Government owes the oil players up to Sh14.52 billion in unpaid subsidies.

“We have offered firm assurances to the oil marketing companies that the Government will honour all obligations,” she said.

The minister says the State is working on “administrative” processes to have the funds released.

“We have to witness normalcy in the fuel sector. Kenyans are suffering,” she said.

Juma says her spot-check shows that Kenya has adequate fuel in its stores to satisfactorily serve the entire country.

“The Managing Director of the Kenya Pipeline Company [Macharia Irungu] has told me that our fuel storage facilities are full with the product,” she said.

“The fuel crisis is not an acceptable situation. The firms that have played a role in the crisis have engaged in deliberate efforts to sabotage this economy.

“Players have been hoarding fuel, hoping that the prices will be increased and, consequently, get a cash windfall.”

She accused some oil marketers of engaging in “speculative behaviour done in bad faith”.

Juma said there were no indications that the neighbouring markets had fuel shortages, yet some oil marketing companies in the country “diverted cargo to external markets”.

After President Uhuru Kenyatta signed the supplementary budget last week, “we had hoped the crisis would self-correct”, said the minister.

According to Juma, the Petroleum ministry had met the oil marketers’ demands half-way, and therefore things ought to have improved.

She said to avert “plunging Kenya into energy crisis”, the Government would be keen on sanctioning oil companies that “cause distress by creating artificial shortage”.

Juma asked companies that are unwilling to comply to exit the Kenyan market. She confirmed that Rubis Kenya CEO Jean-Christian Bergeron had been deported to his native France on Thursday night, April 13. Kenya is accusing him of economic sabotage by allegedly hoarding fuel meant for the local market.

She also said that the Energy and Petroleum Regulatory Authority (EPRA) has issued show cause letters to rogue oil marketers, and those that are hoarding fuel, saying: “It’s a criminal offence not to maintain stock.”

Also sanctioned, are oil marketing companies selling fuel above EPRA-proposed prices.

The Petroleum ministry has also filed formal complaints against unnamed oil marketers, saying they are under investigation by EPRA, the Police Service and the Competition Authority of Kenya. If found culpable of abetting the crisis, the firms will be punished.

The minister also said that the companies that exported most of their fuel to the external markets will have their storage capacities reduced.

In efforts to ensure improved supply of fuel, Juma said fuel tankers will be allowed to move on a privileged basis, and that security will be provided to escort the tankers.

She also said that the Government will provide security to petrol stations that offer 24-hour services.

Juma revealed that Kenya has thus far paid the oil marketers a total of Sh34.6 billion out of the demanded Sh49.16 billion.

She dismissed claims that Kenya sells fuel at higher prices than its neighbours in the region.

For instance, she said, a litre of petrol in Tanzania retails at Sh144.72, Uganda (Sh163.20), Rwanda (Sh154.81), South Africa (Sh172.26) and Zambia (Sh175.42). In Nairobi, a litre of the commodity goes for Sh134.72.

For diesel, she said, a litre of the commodity in Tanzania retails at Sh136.24, Uganda (Sh140.80), Rwanda (Sh155.84), South Africa (Sh167.27) and Zambia (Sh174.27). In Nairobi, a litre of the commodity goes for Sh134.72. In Kenya, the commodity goes for Sh115.6.

She justified the value of the fuel stabilisation fund, saying it goes a long way in cushioning Kenyans against higher cost of living.

The CS said the Government will continue the fuel subsidy programme, though the fund has to come to an end at some point because it was started in April 2021 to provide relief to the citizens.

She, however, says that will happen once the fuel prices normalise in the global market.

In absence of the subsidies, projections indicated that motorists in Kenya would pay as high as Sh175 for a litre of petrol and Sh160 for a litre of diesel.

The minister projects that within 72 hours from Thursday, April 14, the fuel crisis would have eased. That means, Kenyans expect normalcy to resume by Sunday, April 17.

Juma, however, asked Kenyans not to panic-buy fuel, arguing it only worsens the situation.

The Standard
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