Oil Marketers under financial pressure over soaring fuel prices

Oil marketers in Kenya are grappling with increased working capital requirements due to a combination of rising global fuel prices and the depreciation of the Kenyan shilling.

The cost of shipping petrol, diesel, and kerosene has surged by up to 17.3 percent per cubic meter since the beginning of the year.

Petrol’s landed cost recorded the largest increase at 17.3 percent to $774.67 per cubic meter, while diesel rose by 1.3 percent to $789.89 per cubic meter, and kerosene jumped by 6.74 percent to $827.26.

The weakening shilling, which depreciated by 15 percent against the US dollar between January and last month, has further exacerbated the financial challenges for oil dealers by making imports more expensive.

As a result, oil marketers have reported increased borrowing to finance their operations and working capital requirements.

Companies like Vivo Energy and TotalEnergies have taken on significant short-term loans to cope with higher fuel prices and increased finance costs, affecting their profitability.

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Collins Ogutu

Nairobi based Digital Journalist, Corporate Communication Expert and Digital Marketer with a wealth of experience in multimedia. Accredited member of the Media Council of Kenya.

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