On 8^th April 2022, KEPSA Leadership held a meeting with the Principal Secretary for Petroleum and Mining Mr. Andrew Kamau on the fuel shortage. The meeting aimed at establishing how the government is tackling the situation that continues to have a negative impact to the country’s economy.

Present in the meeting was the KEPSA leadership led by KEPSA CEO Ms. Carole Kariuki, KEPSA Chair Ms. Flora Mutahi, Eng. James Mwangi – KEPSA Director in charge of Energy and Extractives, Mr. Patrick Obath – Chair, KEPSA Foundation among other KEPSA leaders and members.

In her opening remarks, KEPSA CEO Ms. Carole Kariuki thanked the PS Kamau for agreeing to meet with the private sector members in an effort to establish the facts and come up with a way forward. Ms. Kariuki highlighted the subsidy issue, where she inquired the sustainability and other options the country has on the same to address the challenges which has led to the current issues with the oil marketers. She noted that fuel pricing affects the economy since fuel is an input in almost every aspect of life.

The KEPSA Chair Ms. Flora Mutahi reiterated the KEPSA CEO’s sentiments by noting that the Government should quickly address the current challenges with the fuel subsidy. “We are going to feel the effects of the Russia-Ukraine War for quite some time and the need to address the fuel subsidy during this period is vital,” She noted.

In his remarks, PS Kamau noted the importance of analyzing the facts to have a bigger picture of the situation. “We need to know where we are, our position and take on the fuel subsidies so that we don’t end up making uninformed choices and decisions,” He said.

The PS noted that disquiet on the Ksh 5 per litre subsidy had to be quelled and this necessitated the engagement with the National Assembly Committee on Delegated Legislation on the same. He further noted that the country had enough physical stock that currently supplies at least 10 million litres daily to pumps countrywide. “We are currently investigating some companies who deliberately caused the fuel crisis and EPRA is leading in these investigations. Those large companies that contributed to this fuel shortage will be slapped with sanctions,” He added.

While responding to a question about the possibilities of the end of the petrodollar, PS Kamau said that the idea of doing away with the petrodollar has not taken any traction despite the fact that Russia has been pushing this agenda since 2016. “People are afraid of currency manipulation and change. Understanding how Ruble works may prove challenging. Euro also is not as liquid as US dollar,” He revealed.

Issues of Kenya’s oil exploration in Turkana also came up. PS Kamau noted the impracticability of having the oil refined locally by noting that currently, Kenya has a potential of 100,000 barrels per day and yet what is commercially viable is at least 400,000 barrels per day. He however mentioned that the country is past the exploration and appraisal stages with Turkana Oil and EPRA is currently going through the fuel plan before it goes to the Parliament for ratification.

Mr. Obath noted that the meeting was timely, and informative and will pave way for engagement with the parties concerned, especially those who don’t understand the intricacies of the fuel crisis. He acknowledged the fact that stabilising fuel prices is not an easy thing to do. He added that this regime has however worked in some parts of the globe and equally failed in others. “The price control regime was all around the Mwananchi and meant to give a fair formula for the market to operate and recognize the key players in the fuel sector,” He noted.

Eng. Mwangi pointed out the unsustainability of fossil fuels and the dangers of overreliance on oil products. He said that there was a need to bring in alternative energy sources to power electric vehicles.  He concluded the meeting by saying that KEPSA won’t stop asking and engaging with the Government on the critical questions to overcome challenges bedevilling the country. He added that continuous engagement on the issues shall follow through with the KEPSA Energy and Extractives Sector Board.

Earlier in the week, KEPSA Energy and Extractives Sector Board had an engagement with Mr. Kamau on the same subject matter. The meeting was to get a technical status update on what the government is doing to address the crisis and ensure the non-franchised (independent) players access to fuel.

The meeting had pointed out that independent players mostly serve the interior parts of the country and when they don’t access fuel, it increases pressure on the fuel station located in urban centres causing panic. To address the situation, the PS noted that the government will work with both franchised players (who are mainly the importers) and non-franchised players to ensure that the non-franchised access to fuel and alleviate the panic hence reducing the pressure.