Fuel shortage ahead of Kenya elections pushes pump prices up
Posted Thursday, February 21 2013 at 02:00
As Kenyans gear up for the polls, there is growing tension from landlocked countries like Uganda linked by Mombasa port that business might be paralysed.
Motorists have to pay a little more for each litre of fuel due to the product’s shortage. The main products affected are petrol whose price has gone up by Shs100 from Shs3,700 to Shs3,800 and diesel by Shs50 from Shs3,450 to Shs3,500.
Kobil Uganda general manager Werner Griesseo, told the Daily Monitor : “I am struggling because the supplies are limited and the only stock we have can take us for two weeks.”
As Kenya Elections draw nearer, there is growing fear from landlocked countries like Uganda, Rwanda and Burundi linked by Mombasa port that business in these economies might be paralysed if the elections turn violent like they did in 2008.
Suspected hoarding ahead of the rainy day as Kenyans go to the polls partly explains the shortage. Mr Griesseo said: “Many people are hoarding the product in case there are interruptions ahead of the Kenya General elections.”
Some fuel dealers have turned to the southern route through -Dar es Salaam port although it is longer and costly. Transporting fuel through Dar es Salaam route costs $200 per 1,000 litres while Kisumu route costs $50.
“We have started using the Southern route to bring in products in preparation for any eventuality in the coming Kenyan elections,” Shell Uganda country manager Ivan Kyayonka, said. To attract importers to use it, government introduced an excise tax waiver of Shs150. “We are already subsidising fuel for traders using the Southern route,” Trade Minister Amelia Kyambadde said.
In this arrangement, the government charges Shs850 while diesel will cost Shs530 for every litre of petrol. International prices are also to blame for the hike in the local fuel price. Experts say that between December and February, there has been an 18 per cent increase in petrol prices now costing $1,108 per metric tonne, up from $955 per metric tonne, respectively.