The Energy Petroleum and Regulatory Authority (EPRA) says the government has delayed compensating Oil Marketing Companies (OMC), a reason behind the fuel shortage that has gripped the country.
In a statement Saturday, EPRA said oil marketers have been holding back to release the commodity over delays by the government to remit cash from the fuel stabilization fund.
“There have been delays in remitting compensation from the stabilisation fund and this has resulted in a number of OMCs holding back sales to the local market.”
The move is more likely intended to force the government to remit dues to oil marketers.
EPRA has directed OMCs to immediately release petroleum supplies in order to alleviate the current supply crises.
The compensation crisis comes even after Members of Parliament allocated Ksh.6.7 billion in mid-March for fuel subsidy to cushion consumers from the shocks of rising petroleum prices under the Petroleum Development Levy Fund (PDL).
“Increase Ksh.6.7 billion (recurrent) for fuel stabilization,” the budget committee of the National Assembly recommended in a report to the full House.
In February, MPs had proposed a Ksh.25 billion fuel stabilisation fund upon Russia’s invasion of Ukraine, a move that has since set the price of commodity soar at a record high.
“We are very aware of the situation with oil prices globally which will impact local prices. We have proposed an allocation of Sh25 billion to the fuel subsidy in our report to the Budget and Appropriations Committee,” said Bonchari MP Pavel Oimeke, who is a member of the Energy Committee.
This happens even as Kenya Pipeline Company (KPC) has confirmed sufficient fuel stocks across its depots in the country.
The State corporation said it has over 69 million litres of super petrol and in excess of 94 million litres of diesel.
“Kenya Pipeline Company would like to confirm that there are ample stocks of petroleum products in our system throughout the country to meet demand,” said KPC Managing Director Macharia Irungu.
Fuel shortage first hit the counties of Baringo, Nandi, Elgeyo Marakwet, Bungoma and Turkana. Most fuel stations were deserted because of the shortage, which started late March.
The Petroleum Outlets Association of Kenya (POAK) had decried alleged artificial shortages that saw the price of petrol skyrocket to over Ksh.200 in North Rift towns.
The associated noted its members were no longer able to sustain their businesses due to unrealistic prices created by artificial shortages.
“Things have gotten worse with the pressures of conflict in Ukraine among other factors pushing the global prices through the roof,” it said.
The crisis has escalated to most regions across the country.