EPRA to compensate Oil Marketing Companies for excess fuel volumes

The Energy and Petroleum Regulatory Authority (EPRA) has assured Oil Marketing Companies (OMCs) that they will receive advance sales compensation for excess fuel volumes accessed beyond quantities factored into current and subsequent pricing cycles.

In a letter dated October 27, 2026, EPRA Director General Edward Kinyua said the arrangement aims to ensure uninterrupted fuel supply across the country while compensating oil marketers for their exposure to the price lag.

The assurance follows a letter from the Principal Secretary in the State Department for Petroleum dated October 1, 2026, which addressed the issue of advance sales compensation.

EPRA said oil marketers that obtain fuel volumes exceeding the quantities accounted for in the existing and upcoming pricing cycles would qualify for compensation for the excess supplies.

The authority explained that the arrangement was intended to support the continuous availability of petroleum products by addressing the financial exposure marketers may face when supplying volumes beyond those considered in the pricing calculations.

“EPRA wishes to assure Oil Marketing Companies (OMCs) that where individual OMCs access volumes in excess of the volumes factored in the current and subsequent cycles, the excess volumes will be due for advance sales compensation,” Kinyua said in the letter.

EPRA said the excess fuel volumes and any additional costs incurred would be assessed on a first-in, first-out basis.

Under this approach, volumes accessed earlier would be considered first when determining the quantities eligible for compensation.

The authority further stated that the verification process would rely on data from the Kenya Revenue Authority (KRA) to establish the excess volumes accessed by individual oil marketers.

The process is expected to provide a basis for determining the quantities and associated incremental costs that qualify for compensation.

EPRA did not specify in the letter the total amount to be paid to oil marketers or the disbursement timeline.

The compensation arrangement comes as the regulator seeks to ensure consistent petroleum supply while addressing the financial implications of the pricing cycle.

The authority said the arrangement would help compensate eligible marketers for their exposure to the price lag while supporting uninterrupted fuel supply in the country.