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Thursday, May 26, 2022

Fuel Crisis Will End in 2 Days – Petroleum PS

  • The current fuel crisis being experienced in the country that has led to long queues at various filling stations will end on Wednesday, April 6, according to Petroleum and Mining Principal Secretary Andrew Kamau. 

    In a TV interview on Sunday, April 3, he intimated that the government would release the money owed to oil marketers, adding that the amount had hit Ksh13 billion. 

    PS Kamau attributed the fuel shortage to the delay in the subsidy payout which led to oil marketers running out of cash flow, a situation that curtailed the supply and distribution of fuel across the country. 

    Motorists queue for petrol fuel at National Oil in Nyamira town.
    Kenya News Agency

    He also factored in the high market price for the crucial commodity, noting that it locked out small-scale oil marketers.

    This, in effect, led to the giant players having to cope with the rise in demand from motorists as some stations suspended operations because of the shortage.

    “This thing is a classic run, it’s the same if all of you go to the bank in order to withdraw, they don’t have the money sitting there. 

     “It’s the same thing with petrol stations, you have to get it from the tank to the petrol station. What has happened is that the high import price is causing some of these small players to incur cash flow issues.

    “Looking at how the supply pattern works in Kenya, it’s rare that you would find cars filling their tanks to the brim but nowadays you find all motorists requesting a full tank,” Kamau told NTV during prime time news. 

    The PS also explained the lengthy process taken in order to determine the fuel prices- pointing out the vital role played by the government in shielding Kenyans from the surging prices. 

    “The pricing cycle is from the 9th of the previous month to the 10th of the pricing month. Once that is done, EPRA sends to us the calculation of what the difference is between the actual price and the price that the government provides to Kenyans. An audit also has to be conducted in order to verify the amount we’re paying,” he added.

    EPRA, in a previous statement, attributed the shortage to the delay in compensating margins to Oil marketing companies, which led to hoarding of the commodity. 

    “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 stabilization fund and this has resulted in a number of Oil Marketing Companies (OMCs) holding back sales to the local market,” EPRA stated. 

    Already matatu operators are warning of a looming crisis should the shortage persist with some withdrawing vehicles from the road.

    Speaking to kenyagist.com, Matatu Owners Association Chairman Simon Kimutai noted that the fuel crisis was pushing the cost of doing business to unprecedented limits.

    “Grounding of vehicles is caused by the shortage of fuel and hiking of fares is because of demand outfitting supply, market forces. This is temporary, normalcy will resume as soon as the supply of fuel stabilises and without prices being hiked,” stated Kimutai.

    Petroleum PS Andrew Kamau.
    Petroleum PS Andrew Kamau.
    File
  • Source: KENYAGIST.COM

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