The Energy and Petroleum Regulatory Authority (EPRA) whose mandate among the many is to regulate “Production, conversion, distribution, supply, marketing and use of renewable energy” has failed to do that effectively.
It was against such things as hoarding of fuel supplies so as to create artificial shortage which in turn leads to higher profits for marketers that EPRA was formed.
However, information reaching cnyakundi.com on the mismanagement of the agency by one Pavel Oimeke is worrying.
Mr Oimeke was the puppet of such Total Kenya, a very powerful oil marketer in Kenya.
As the COVID-19 pandemic ravaged the world, global oil prices plummeted to record lows and one would expect that in Kenya, fuel at the pump would sell at about Sh50 or Sh60, the later a Sh10 margin to cover for profits as Sh50 is all the taxes lumped on fuel in the cartel country.
However, in June 2020, Total informed its dealers that there was shortage of fuel and that they would be rationing supply. This was a move that was well-calculated in collusion with Oimeke’s EPRA.
Between June 15th and July 14th, EPRA had set the price of super petrol at Sh89.10 a litre in Nairobi, diesel at Sh74.57 a litre and kerosene at Sh62.46 a litre. This was an increase in prices from the previous month. And it was during a pandemic.
As countries began loosening Covid-19 restrictions towards mid-2020, the vultures descended. The hoarding of fuel products began ahead of July 15th when EPRA would set the new prices. They wanted to
hold onto fuel they had purchased at lower prices in June and sell the same at much higher prices in July.
Total Kenya told its dealers that could not get the quantities they were asking for. The dealers were in turn forced to purchase a certain quantity of diesel in order to be supplied with super petrol.
This caused a shortage of super petrol within some petrol stations within Nairobi. A dealer gathered courage and informed EPRA of these developments as the situation threatened to get out of hand.
EPRA appeared to fire a warning shot, “The Energy and Petroleum Regulatory Authority (EPRA) has received reports of artificial shortage of petroleum products in the country particularly in Western Kenya, despite the country being sufficiently stocked. Preliminary investigations indicate that a number of Oil Marketing Companies (OMCs) are deliberately holding back sales to non-franchised petroleum retailers otherwise known as independents, in anticipation for a price increase. This practice is tantamount to hoarding and is an offence under Section 99(1)(k) of the Petroleum Act No. 2 of 2019,” EPRA wrote to OMCs.
The warning fell on deaf ears as this was a toothless dog, bought-off-management, barking orders for PR.
Despite a warning by EPRA that ‘the vice on conviction could result to a fine of not less than Sh1 million, or a term of imprisonment of not less than one year, or both and that not hesitate to permanently revoke licences for companies or individuals found in breach of the above mentioned provision’, the hoarding by Total Kenya continued.
Meanwhile, across the border in Tanzania, such nonsense is not tolerated.
The Magufuli-led country had stormed a meeting of OMCs in that country and arrested heads of some oil marketers for ‘hoarding fuel products and thereby causing artificial shortages in anticipation of significant price increases and therefore better margins’.
In that crackdown, Total Tanzania’s MD Jean-Francois Schoepp, Puma Supply Manager Adam Eliewinga and Oryx’s representative August Dominick were arrested.
According to EPRA regulations, OMCs are required to have at least 21 days of stock. This therefore means that cases of shortages resulting into fuel rationing should not arise. But we experienced it and EPRA did nothing yet they were aware,” a dealer intimated.
In July EPRA announced an increase in fuel prices as anticipated by the oil marketers.
For Total Kenya, in order to silence staff and affiliate petrol stations, a ban on talking to the media was enacted.
In a manner akin to Slavery In Kenya, Total Kenya experienced shortage of diesel towards the end of 2020 and in slave-driver style. During such times, its dealers are slapped with arbitrary fees and rent
increases
The artificial shortage of fuel is an age old cartel move that in the past, through the Triton Scandal robbed taxpayers off Sh7.6 billion.
This is the beginning and Cnyakundi.com will be talking to dealers to serialise this scandal.
