Independent petroleum dealers in Kenya, represented by the Petroleum Outlets Association of Kenya (POAK) and the Kenya Independent Petroleum Dealers Association (KIPEDA), have issued a joint directive to suspend the purchase of petroleum products. This move comes after allegations of major Oil Marketing Companies (OMCs) charging wholesale rates that exceed the statutory limits established by the Energy and Petroleum Regulatory Authority (EPRA). The dealers claim that OMCs have been selling petroleum products at prices well above the maximum wholesale ceilings published by EPRA.
The core dispute stems from wholesale overpricing by major OMCs, which has persisted since October 15. Independent operators are forced to buy products at inflated wholesale costs while being legally bound to retail within EPRA's capped pump prices, leaving them operating at severe financial losses. The associations have warned that independent stations nationwide are facing critical product stock-outs and are confronted with a stark choice: either close their doors indefinitely or continue trading into bankruptcy.
The dealers have directed sharp criticism at both EPRA and the State Department for Petroleum, demanding immediate enforcement action against oil marketing companies that are flouting pricing regulations. They warned that any further delay or inaction by the state regulator risks cascading into a complete breakdown of fuel distribution channels nationwide. Independent dealers play a vital role in Kenya's downstream petroleum sector, often servicing remote and peri-urban areas that major oil marketers overlook.
A prolonged standoff or widespread closures among independent outlets would instantly paralyze transport networks, disrupt supply chains for agricultural produce, and drive up transportation costs across the board. The timing of this looming supply disruption could not be worse, as households and enterprises are already grappling with an elevated cost-of-living crisis, worsened by heavy taxation on basic commodities and energy products.
This latest clash follows hard on the heels of intense public anger triggered by EPRA's announcement of sharp fuel price hikes for the October 15 to November 14 pricing cycle. During the mid-October review, EPRA adjusted pump prices significantly upward, with Nairobi's Super Petrol price surging by Sh12.93 per litre, diesel by Sh9.90, and kerosene by a staggering Sh28.49.
EPRA had originally capped the wholesale prices in Nairobi at Sh211.80 per litre for Super Petrol, Sh212.60 for diesel, and Sh204.79 for kerosene. However, independent dealers claim OMCs have blatantly bypassed these wholesale safety margins, squeezing the profit margins of smaller distributors out of existence. The escalating dispute threatens to trigger widespread stock-outs and force independent petrol stations across the country to shutter their operations.
As the standoff between independent dealers and major wholesalers continues, consumers are left anxious about the immediate future. The associations have advised all independent petroleum operators countrywide to immediately suspend the purchase of petroleum products at rates exceeding the gazetted EPRA wholesale limits. The Kenya Independent Petroleum Dealers Association and the Petroleum Outlets Association of Kenya have called for regulatory intervention to address the issue.
Key points
- Independent petroleum dealers in Kenya threaten to halt fuel purchases amid allegations of predatory pricing by major Oil Marketing Companies.
- The dispute stems from wholesale overpricing by major OMCs, which has persisted since October 15.
- A prolonged standoff or widespread closures among independent outlets would paralyze transport networks and disrupt supply chains.
