Independent fuel dealers threaten supply halt over wholesale price dispute

Independent petroleum dealers have threatened to suspend fuel purchases from oil marketing companies (OMCs) over alleged violations of wholesale price caps set by the Energy and Petroleum Regulatory Authority (EPRA), warning that the dispute could trigger shortages at petrol stations across the country.

In a joint statement issued on Tuesday, October 27, the Petroleum Outlets Association of Kenya (POAK) and the Kenya Independent Petroleum Dealers Association (KIPEDA) accused oil marketing companies of selling fuel to independent dealers above the maximum wholesale prices gazetted by EPRA for the October-November pricing cycle.

The associations urged independent fuel station operators to immediately stop purchasing petroleum products at prices exceeding the regulatory limits.

“We advise all independent petroleum operators countrywide to immediately suspend the purchase of petroleum products at rates exceeding the gazetted EPRA wholesale limits,” the associations said.

The dispute follows EPRA's publication of maximum retail and wholesale prices on October 14, which took effect on October 15.

According to the associations, the wholesale price cap in Nairobi was set at Sh211.80 per litre for super petrol, Sh212.60 for diesel and Sh204.79 for kerosene.

The maximum retail prices were set at Sh226.96 per litre for super petrol, Sh227.27 for diesel and Sh219.87 for kerosene.

However, POAK and KIPEDA alleged that oil marketing companies had disregarded the wholesale limits and continued supplying independent dealers at higher prices.

The associations said they had raised the matter with EPRA and the State Department for Petroleum but claimed that 12 days had passed without compliance or enforcement action.

The alleged violations have squeezed profit margins for independent dealers, who say the higher purchase prices make it difficult to operate within the regulated retail prices.

The associations warned that the situation was contributing to fuel stock-outs at independent stations nationwide, raising concerns about the reliability of supplies to consumers.

They said independent operators were being forced to choose between closing their businesses and continuing to sell fuel at substantial losses.

“The refusal of OMCs to adhere to wholesale caps threatens to undermine consumer price protections guaranteed by law,” the statement said.

The dealers argued that continued non-compliance could threaten the viability of independent retail outlets, which they said account for a significant share of the country's fuel distribution network.

They called on EPRA and the State Department for Petroleum to take immediate regulatory action against companies found to be violating the published wholesale prices.

“We demand that EPRA and the State Department for Petroleum take swift regulatory sanctions against non-compliant OMCs to restore lawful trading conditions immediately,” the associations said.

The groups also urged the government to intervene to prevent a wider disruption of fuel distribution, warning that prolonged supply difficulties could affect motorists and other fuel consumers.

Despite their threat to halt purchases above the prescribed limits, POAK and KIPEDA said they remained open to discussions with the government and the regulator to resolve the dispute.

“We remain open to immediate constructive engagement with the Ministry and EPRA to resolve this bottleneck and restore market integrity,” they said.

The statement did not identify the oil marketing companies accused of charging above the wholesale caps or provide a breakdown of the alleged price differences.

EPRA and the State Department for Petroleum had not provided a response in the statement to the allegations raised by the independent dealers.