Oil Politics: Expert Opines Kenyans May Enjoy Better Fuel Prices if Govt Imports Directly

• The government published regulations that will allow the direct importation of petroleum products
• The new laws came at a time Kenya pushes for fuel importation from the government of Saudi Arabia
• Petroleum Outlets Association of Kenya (POAK) chairman Martin Chomba welcomed the move saying it will ensure the best pump prices
• Chomba said that independent dealers will get an ensured quota under the new fuel import regulations

Kenyans are likely to enjoy reduced pump prices in 2023 if the government imports fuel directly, without relying on marketers.

The state passed a law that will allow government-to-government direct importation of petroleum products.

Petroleum regulations 2022

Petroleum Outlets Association of Kenya (POAK) chairman Martin Chomba said the new rules will ensure independent marketers have their own quota.

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"This is a good move because it's likely to ensure the best prices are achieved in procurement since the government will negotiate on behalf of the marketer.

"It will also cut off the product hedging middle dealers since it will be a government-to-government transaction, giving independent dealers an ensured quota...hence the security of supply," said Chomba in an exclusive interview with TUKO.co.ke.

Chomba noted 30% of the imports will be reserved for independent oil marketers, as stipulated in the new petroleum regulations 2022.

The rules will give the country access to extended credit periods from suppliers, saving it from foreign exchange reserve pressure.

"The regulations enable the country to negotiate for discounts on product cost and freight while giving access to extended credit periods from suppliers. This will reduce current pressures on Foreign Exchange Reserves," read the regulations in part, according to Business Daily.

The regulations came amid Kenya's talks to have a third of its fuel import from the Saudi Arabia government.

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Through the National Oil Corporation of Kenya (NOCK), the government will import 30% of petroleum products, selling to small independent dealers.

Pump prices

The Energy and Petroleum Regulatory Authority (EPRA) released the pump price review for December 2022.

The regulator said the prices of petroleum products will remain unchanged from December 15, 2022, to January 14, 2023.

Currently, a litre of super petrol in Nairobi retail at KSh 177.30, diesel at KSh 162 and kerosene at KSh 145.94.

Source: TUKO.co.ke