Kenyan consumers are facing fresh fuel shortages as some major oil marketing companies (OMCs) in Nairobi exhausted their stocks and turned away motorists amid serious cash-flow challenges triggered by dollar shortages.
A spot-check by The EastAfrican revealed that several filling stations in parts of the Kenyan capital Nairobi had run out of petroleum products from the weekend, with those owned by Vivo Energy among the hardest hit.
By Sunday afternoon, several outlets by Vivo under the Shell brand had run out of super petrol, with attendants giving motorists the option of buying the company’s V-Power brand. The situation deteriorated Monday with some of the Shell outlets reporting total depletion of products including super petrol, V-Power and diesel.
Vivo did not respond to our queries over the scarcity of fuel at its retail outlets even though insiders and an industry association attributed the situation to a dollar shortage.
Insufficient dollars
“There is sufficient fuel at the depots but the major oil companies are not evacuating it because they do not have sufficient dollars,” said Petroleum Outlets Association of Kenya (POAK) Chairman Martin Chomba.
The major oil companies such as Vivo, TotalEnergies, Rubis and Ola Energy buy fuel in bulk and supply it to the smaller independent retail outlets, meaning that a shortage at these top firms cascades down to the smaller players.
Kenya is currently battling an acute shortage of US dollars primarily due to pressure exerted by external debt repayments.
Data from the Central Bank of Kenya (CBK) released on Friday shows forex reserves dropped to $6.6 billion (Ksh845.46 billion) on March 2 from $6.86 billion (Ksh878.76 billion) on February 23. This translates to 3.69 months of import cover, which is below the set threshold of four months and comes despite CBK Governor Patrick Njoroge constantly downplaying the shortage.
Higher global prices
Demand for forex has shot through the roof in recent months as importers seek more dollars to finance imports owing to higher global prices of fuel, food products, cooking oil, steel and other imports.
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