The scheme to create an artificial shortage of fuel through hoarding by the petroleum dealers was clandestinely masterminded by influential cartels who deployed their representatives to filling stations to monitor the deliberate ‘drying’ of fuel pumps, investigations by The Informer have been established.
In their push for the government to settle the Sh34.4 billion fuel subsidy fee actualised through the supplementary budget, the oil dealers managed to hold the government hostage, causing an almost complete paralysis nationally.
The elaborate plot was executed under the close watch of franchised fueling stations by third parties holding briefs for the powerful amorphous groups with instructions to retailers to intermittent fuel from one pump only.
Their modus operandi to arm-twist the government and which was flawlessly executed almost across all parts of the country points to be a deeply entrenched web of cartels controlling the lucrative oil sector.
“There were people who were deployed to oversee that we don’t sell fuel from more than one pump.
Only the fuel attendant or managers would identify them since they monitored from a distance posing like any other client.
Indeed, we had underground reservoirs,” our source working in one of the major outlets revealed.
Petroleum Principal Secretary Andrew Kamau and the Kenya Pipeline Company management affirmed that the country had enough oil stocks, attributing the crisis to an artificially engineered scheme.
Kamau said the government would take stern action against any oil dealer found hoarding the precious commodity.
The PS said that once investigations into the shortage are finalised, the regulator will penalise and withdraw licenses to the masterminds.
“This is an artificial shortage,” Kamau said. “We are aware of the hoarding issue, and we are dealing with it.
You (marketers) can lose a license, but we do not want to go there for now.
After the crisis, something must happen because there are conditions attached to those licenses,” Kamau added.
There are instances where some outlets were selling fuel at exorbitant prices than usual.
The Petroleum Act of 2019 imposes a fine of Sh10 million or five years in jail for dealers who sell fuel above the price set by the Energy and Petroleum Regulatory Authority (Epra) and a further Sh1 million or a jail term of one year or both, for marketers caught hoarding.
“They feel they want to force the government to do something, for example, increase their margins (by releasing the subsidy cash.) It is within their right; they are in business. But they’re creating panic.
Call the Kenya Ports Authority (KPA) now, and find out how many ships [full of petroleum products] are waiting to discharge,” said Kamau.
The fuel shortage started in the Western and North Rift regions before hitting the other counties.
Nairobi on Friday, there was panic buying that saw dealers hike prices and others limit the amount of fuel being sold per motorist.
A litre of petrol is retailing at above Sh200 in some filling stations breaching the level set by Epra in its last monthly fuel review.
In Nairobi, diesel and petrol prices are capped at Sh115.60 and Sh134.72, respectively, for April 15 – the highest level in Kenya’s history.
Public transport service providers have warned they will hike fares in the near future. Late last year, the Oil Marketers Association of Kenya (OMAK) chaired by Abdi Ali Salaad decried of alleged smuggling of 30,000 metric tonnes of petroleum into the country by Gulf Energy Limited on the New Year’s Eve.
The revelation incriminated top government officials, senior parastatal officers and oil-tenderpreneurs.
According to insider sources, the officials at the Ministry of Petroleum and Mining are said to have offered a safe veil of shield to invisible but well-connected team code-named “elite group” to facilitate clearance of the consignment at the Port of Mombasa.
Our sources also intimated the timing was also conducive to evade possible detection. Records show that the vessel, M/T Jag Prerana, was allowed to offload the fuel, worth billions of shillings, by officials from the Ministry of Petroleum following a request from oil marketer Gulf Energy despite the fact that it was not among the firms prequalified to bring in the commodity.
Joseph Wafula, Chief Economist at the Ministry of Petroleum directed clearance of the consignment upon payment of the requisite levies and taxes on December 30, 2021.
Charles Nyakundi, Supply and Trading Manager at Gulf Energy had written to the ministry and the Kenya Pipeline Company (KPC) seeking clearance for the cargo to be offloaded.
Through a protest letter to Petroleum and Mining Principal Secretary (PS) Andrew Kamau, Oil Marketers Association of Kenya (OMAK) questioned how Gulf Energy Limited imported 30,000MT of gasoline for an “elite” group of oil marketers without knowledge of the all-other oil marketing companies (OMCs).
OMAK said the timing for both arrival and discharge of the cargo by Gulf Energy was meant never to be discovered due to the festivities and now wants the ministry to investigate the matter.