MPs raise concerns over fuel hoarding as prices rise

It has emerged that there has been an artificial fuel shortage in some parts of the country after a parliamentary probe into the matter revealed that Kenya has sufficient petroleum stocks.

This has shifted the spotlight to fuel hoarding by individual businesses as the likely cause of supply disruptions across several regions, as suppliers waited for last night's fuel review by the Energy and Petroleum Regulation Authority (EPRA)

Members of the National Assembly Committee on Energy made the revelation after conducting an assessment visit to the Kenya Pipeline Company (KPC). 

The lawmakers said real-time data from KPC’s control systems on Tuesday confirmed that depots in Mombasa, Nairobi, Kisumu, Nakuru and Eldoret all have adequate fuel reserves.

As at 12 pm, data seen by The Standard indicated that Tank 2003 had 2.4 million litres of super petrol while Tank 302 had 10 million litres of diesel, figures they said were adequate for the country's demand.

During the visit, members were taken through live operational data showing stock levels and product movement across the country.

“We are satisfied that the country has enough fuel stock,” said the committee chair and Nakuru Town East MP David Gikaria, noting that the figures presented by technical teams in multiple depots were consistent and verifiable in real time.

“There is evidence of hoarding. Some traders are holding fuel waiting for prices to rise. That is unacceptable,” he added.

However, the lawmakers expressed concern that despite the sufficient stocks, some regions — particularly Kisii, Nyamira and Migori — continue to experience shortages. 

"These are rogue business people who want to defraud Kenyans. This will come to an end.  We have established that there is adequate fuel in the Kisumu depot that is enough to supply our regions even for the next 14 days or so," said Awendo MP Walter Owino.

Nyatike MP Tom Odege urged the Energy and Petroleum Regulatory Authority (Epra) "to go to the ground and flash out the firms hoarding fuel awaiting an increase in the prices when the country has enough."

This comes days after Epra issued show cause letters to at least 10 firms that have been accused of increasing fuel prices above authorised prices.

Despite the revelations, contradicting scenarios continue to be reported across the country. The Standard observed empty pumps in several Rubis Petrol stations during a spot-check on Wednesday.

And in some cases, the quantity of fuel a motorist would buy for their vehicles was capped at Sh500. This was the case at Rubis South B.

The committee now believes the disconnect lies not in supply, but in distribution and market practices.

Attention has now turned to the Energy and Petroleum Regulatory Authority (EPRA), which the committee plans to engage to establish whether oil marketing companies have lifted fuel from depots and delivered it to retail outlets as required.

“It is not enough to have full tanks at KPC. We expect marketers to collect the product and ensure it reaches consumers,” the committee noted, adding that storage facilities should not remain full if distribution systems are functioning properly.

Lawmakers raised the possibility that some of the fuel held in storage could be designated for export, directing KPC to issue a report to the House early Wednesday.

KPC has also been asked to provide a breakdown of stocks meant for local consumption versus export markets.

“What we saw is a system where product is coming in and going out simultaneously. That is how it should operate. We do not want to see tanks full while Kenyans are experiencing shortages,” the committee stated.

To address the issue, the committee has requested compliance and enforcement reports from EPRA covering the period between January and March. 

These reports are expected to detail inspections carried out by enforcement teams, violations detected and actions taken against offenders.

“The ultimate penalty should be licence revocation. Anyone found hoarding, overpricing or adulterating fuel should not be allowed to operate in this sector again,” the committee warned.

This comes amid anxiety among Kenyans as they await the review of pump prices for the next month.

Kiharu MP Ndindi Nyoro sharply criticised the government for what he termed as “insensitive and disorganised” communication ahead of the expected fuel price review today.

In a hard-hitting press briefing on Tuesday at his office in Nairobi, Nyoro faulted authorities for failing to first explain measures being taken to cushion Kenyans from global fuel price shocks. 

“It will be very insensitive for the government to announce new prices without telling Kenyans what it is doing to lessen the burden,” he said.

He accused leaders of prioritising politics over pressing economic concerns.

“They have all the time to keep campaigning every day, but they do not see the weight of fuel disruption,” Nyoro said, adding, "Kenyans should not expect anything Iran added in the statement,  'reduce VAT on fuel now—not tomorrow (Wednesday), cut levies and introduce subsidy."

He also slammed the State over "dramatic arrests and hounding out of office" the immediate former bosses in the energy sector during the Easter Holidays, terming it "a circus."

As the new price announcement approached, government communications urged calm, but have not been matched by some industry players, who have raised pump prices above EPRA limits.

Civil society organisations, including Transparency International Kenya, the Kenya Human Rights Commission, the Institute of Social Accountability, and Inuka Kenya Ni Sisi!, called for an audit of the framework by the Office of the Auditor-General.

The G-to-G arrangement, introduced in 2023, allows oil marketers to purchase fuel from selected firms in Saudi Arabia and the United Arab Emirates on a six-month credit arrangement, easing pressure on the shilling against the US dollar.

The importation of fuel outside this pre-negotiated arrangement is cited as the origin of the Sh4.8 billion scandal. “This fuel was a contingency measure due to disruptions arising from the US–Iran conflict, which affected global supply chains,” the report notes.

“Given the deep-seated concerns surrounding the G-to-G framework, including allegations of manipulation by some State actors and politically connected business interests, we call upon the Office of the Auditor-General (OAG) to conduct a comprehensive audit to assess its efficiency, efficacy, and whether it delivers value for money to Kenyans,” the civil society statement read.

“We further call upon the Ethics and Anti-Corruption Commission (EACC) to undertake a corruption risk assessment of the framework and, together with relevant enforcement agencies, ensure that audit findings translate into concrete investigative, prosecutorial and administrative action, with clear timelines for implementation and public reporting on progress,” they added.

While the importation was sanctioned at the Cabinet level, the exit of former EPRA Director-General Daniel Kiptoo, Kenya Pipeline Company Managing Director Joe Sang, and Petroleum Principal Secretary Mohamed Liban through resignations has raised further questions.

NIA says that while the Cabinet Secretary for Energy bears primary oversight responsibility, there are also credible concerns regarding trade-related approvals, particularly any waiver or relaxation of stringent quality checks by the Kenya Bureau of Standards (KEBS) to expedite importation, offloading and distribution processes.

“In this regard, both the Cabinet Secretary for Energy and the Cabinet Secretary for Trade should take responsibility and step aside to allow for a credible, impartial investigation, as accountability cannot be limited to isolated offices where systemic failure is evident,” the civil society bodies said in a statement.

A statement last week by Energy Cabinet Secretary Opiyo Wandayi ordered 60,000 metric tonnes of super petrol imported by One Petroleum Ltd to be withdrawn from the country, stating that the consignment would have increased the pump price per litre by Sh14. Its price was Sh58,000 more per metric tonne.

According to the March–April cycle, petrol currently retails at Sh178 per litre, while diesel goes for Sh166. In the February–March cycle, EPRA reduced fuel prices by Sh4.24 for petrol and Sh3.93 for diesel, but these rates were retained in the March–April review.

The April–May price cycle will be announced today.

In recent days, EPRA has intensified action against outlets selling fuel above set prices amid shortages. “Field inspections across the North Rift are in full swing to verify fuel availability and monitor stock levels at retail outlets and depots. Findings so far confirm stable supply chains and adequately stocked stations,” EPRA said on April 10.

The authority has also issued show-cause letters to 10 outlets found selling fuel above set prices, including Zabco in Cherangany, Jakam (Meru), M-7 Kilauty (Trans Nzoia) and Eqwipetrol Naja (Kirinyaga).

While the G-to-G framework has been the government’s defence line whenever fuel issues arise, this position is becoming increasingly blurred as developments in the US–Iran conflict continue to shift.

A few days ago, when a two-week truce was announced by Iran and the United States, oil prices softened to below Sh13,000 (USD 100) per barrel.

However, President Donald Trump’s recent stance on introducing a blockade of vessels accessing the Strait of Hormuz, after the two countries failed to agree on ceasefire terms, reignited a rise in oil prices.

By yesterday, a barrel of oil that had fallen to Sh12,000 was trading at Sh13,520. With neither side willing to fully de-escalate, the situation is expected to worsen, especially for African economies dependent on this route.

Ronald Mlalazi, President of the Africa Supply Chain Confederation, said: “Yes, oil is the headline. The International Energy Agency is already calling this the largest disruption in oil market history, with up to 30 per cent of global oil flows affected.”

“Prices are responding accordingly. Analysts are openly discussing Sh19,500 to Sh26,000 per barrel scenarios if disruption persists for four to eight weeks,” he added.

He further noted: “The same passage is used to import fertiliser, petrochemicals, plastic inputs and liquefied natural gas.”

“And that is where Africa gets hit hardest,” he said. “Across East and Southern Africa, dependence on Middle Eastern supply chains is structural, not optional. Countries such as Kenya, Tanzania, Ethiopia and Zambia are already implementing emergency measures, including subsidies and reserve releases.”