Kenyan firms are crying foul over lost petroleum products transport business as fuel adulteration and slow clearance push traders out of the Northern Corridor.
East African Community states (EAC) save for Uganda have since the beginning of the year reduced the amount of fuel they import from Kenya due to concerns over fuel adulteration, Kenya Transporters Association (KTA) executive officer Alfayo Otuke said yesterday.
He said delays caused by many roadblocks along the Northern Corridor and slow clearance of cargo by government agencies and weighbridge congestion had exacerbated the problem.
“Kenya’s position as the preferred petroleum products importation path for landlocked countries of Uganda, South Sudan, Burundi, Rwanda and Democratic Republic Congo is slipping out of our hands despite increased local consumption that has led to phenomenal growth of the market,” he said, adding that transporters were losing their contracts to their counterparts in Tanzania.
“Tanzania’s efforts to transform the country into the preferred petroleum import route for the landlocked EAC countries is already threatening to eat up Kenya’s share,” he added. The country also has access to the Indian Ocean .
Early this month, the government revoked licences of companies involved in the sale of adulterated petroleum products along the Eldoret-Nakuru highway.
Energy Cabinet Secretary Charles Keter said Kenya has lost its regional oil market due to adulteration of fuel on transit. “We have decided to cancel all the licences for the firms involved. We cannot allow cartels to compromise the quality of our petroleum products,” he said.
Since then, police have unearthed a syndicate involving petrol stations: three in Rongai, one in Pipeline area and the other near Molo.
Mr Otuke, who joined KTA two months ago, said the Association has called an urgent meeting on October 8 of all its members to discuss the way forward. They want the government to take measures and crack down on cartels involved in fuel adulteration to save the market.
According to data compiled by KTA, Rwanda, which used to import an average 60 metric tonnes of diesel through Kenya each month, scaled down in July, opting for Tanzania which it claims has cleaner fuel and has a bigger axle load limit offering better economies of scale.
Burundi has since May not imported any diesel from Kenya. This year it has only imported kerosene through Kenya in March and May, jet fuel for only three months while its importation volumes of petrol have dropped from a high of 2,121 metric tons in January to zero in July, the KTA statistics show.
“The DRC, which in January imported 11,425 metric tonnes of diesel, had by July reduced importation of the fuel through Kenya, mostly used by commercial vehicles by 14 per cent to 9,817 metric tonnes,” KTA says in a brief.
“We have established that this has everything to do with fuel adulteration, a vice where unscrupulous dealers mix kerosene with other petroleum products in order to increase volumes while Energy officials slumber or look aside. For a long time it was applied to products meant for local consumption but has now widened to the export market, causing transporters sleepless nights,” Mr Otuke told Business Daily in an interview.
Last year, Kenya exported a total of 2 billion litres to the five East African countries and the Democratic Republic of Congo, raking in $700 million. Uganda is currently Kenya’s biggest buyer of petroleum products, importing 1.16 billion litres last year followed by South Sudan, DRC and Rwanda which imported 461 million litres, 303 million litres and 32 million litres respectively.
The other challenge Kenyan transporters are facing is that of slow implementation of the East African Community Vehicle Load Control Act, 2016 which limits axle load to 56. Other countries within the EAC have adopted the Act, leaving Kenyan transporters using 52 tonnes, which gives their Tanzania counterparts an edge.