Fuel in Kenya has been in short supply in recent weeks, leading to long queues at filling stations, disruptions in the public transport system, prices of goods rising, with travellers and motorists left stranded.
The Kenyan government claims that storage facilities are stocked and that the fault lies with fuel companies holding on to stock while they wait for the announcement of new prices mid-month.
The government has ordered the deportation of Christian Bergeron, the CEO of Rubis Energy Kenya, a subsidiary of France-based Rubis Group, over what it claims is economic sabotage.
It believes that oil marketers are limiting the supply of fuel to the local market and instead prioritising exportation to neighbouring countries.
Bergeron’s work permit was revoked as the Kenyan government is accusing him of hoarding fuel, thereby leading to the nationwide shortage. It is unclear why Bergeron seems to be the only senior oil executive country being targeted, or whether other work permits will be taken away.
The government is also threatening to punish accused companies by putting a limit on the volume of fuel they will be allowed to import in the next quarter.
The Energy Regulatory Commission (ERC) of Kenya sets the maximum retail pump prices for various products each month, and this remains the rule from the 15th of the calendar month to the 14th of the next.
Kenya fuel companies used to sell about 65% of their imports to the local market, with the rest going to Uganda, Rwanda and the DRC. However, in order to ease their cash crunch, companies have now increased the share going to neighbouring countries to about 60%.
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Experts say the fuel crisis is due to a delay in payment of fuel subsidies owed to oil marketers. The fuel subsidy was introduced in April 2021 to stabilise prices amid suspicion of hoarding. However, this payment delay has led to an increase in price in the wholesale market where oil majors resell fuel to smaller independent retailers who control 40% of the market.
Dealers say the government owe them over Sh20bn, but the government says it only owes Sh13bn and on 4 April paid Sh8.2bn of the debt.
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