Kenyans, laden with high fuel costs, will soon start enjoying lower prices of petroleum products.
This follows Kenya Pipeline Company’s revelation of a drastic reduction in its storage costs.
The company says it is a matter of time before the benefits of the four storage tanks at its Nairobi depot start trickling down to taxpayers.
Managing Director Joe Sang told MPs on Wednesday that the firm had already cut by 50 per cent, fuel storage costs.
He cited the commissioning of 133 million-litre storage tanks at the company’s Nairobi terminal.
Sang told the National Assembly departmental Committee on Energy that the monthly demurrage costs had reduced significantly from Sh154 million in June to Sh79 million in October.
“Besides guaranteeing the security of supply of petroleum products, the new tanks have also enhanced operational flexibility and increased tank turnaround at Kipevu, Mombasa, resulting in more ullage creation and significant reduction of demurrage charges.”
The reduction of the storage charges means that Kenyans will soon start paying less for their fuel because demurrage costs are usually factored in the prices set by the Energy Regulatory Commission.
At the moment, tanker owners charge marketers demurrage penalty, which adds to about a shilling per liter, due to insufficient ullage.
Demurrage charges are incurred as vessels are forced to wait at the Mombasa port to discharge fuel into KPC’s system because of insufficient capacity.