EPRA Promises Oil Marketers Compensation as Independent Petrol Stations Face Stock-Outs

The Energy and Petroleum Regulatory Authority (EPRA) has promised advance compensation to oil marketing companies supplying extra fuel to Kenya as independent petrol dealers report stock shortages and threaten to suspend purchases over disputed wholesale prices.

EPRA Director General Edward Mwirigi Kinyua announced the arrangement in a letter dated October 27, explaining that companies accessing petroleum volumes beyond those captured in current and upcoming pricing cycles would qualify for compensation.

The move targets additional costs incurred by oil marketers when actual supply expenses differ from the costs used to calculate regulated fuel prices. The difference, commonly known as price lag, can expose suppliers to financial pressure when they bring in extra petroleum products.

EPRA said the additional volumes and associated costs would be assessed on a first-in, first-out basis. The Kenya Revenue Authority will help verify the quantities and costs involved before compensation is determined.

The announcement comes amid a dispute between oil marketers and independent fuel retailers over alleged breaches of regulated wholesale prices.

The Petroleum Outlets Association of Kenya and the Kenya Independent Petroleum Dealers Association have accused some suppliers of charging independent dealers more than the maximum wholesale prices set by EPRA.

The two associations advised independent petrol station operators to stop purchasing fuel from suppliers allegedly charging above the gazetted limits. They warned that some outlets had already run out of fuel, while others risked shutting down because they could not afford the prices being demanded.

The dealers said the alleged violations began on October 15, when the latest fuel pricing cycle took effect. They also claimed to have lodged complaints with EPRA and the State Department for Petroleum.

In Nairobi, the maximum wholesale prices for the current cycle were set at KSh211.80 per litre for Super Petrol, KSh212.60 for diesel and KSh204.79 for kerosene.

At the pump, Super Petrol prices increased by KSh12.93 per litre, diesel by KSh9.90 and kerosene by KSh28.49 for the October 15 to November 14 period.

The increases followed the government’s suspension of the fuel price stabilisation mechanism, which had previously cushioned motorists against rising costs.

EPRA’s latest intervention seeks to address the financial pressures facing suppliers, although the dispute over wholesale prices remains a concern for independent retailers and motorists.

https://www.kenyans.co.ke/news/128957-epra-reveals-new-compensation-plan-oil-companies-prevent-fuel-shortages

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