Inside Politics

Turkana petrol stations close, fault Epra pricing

Friday, August 13th, 2021 00:00 |
Oil product. Photo/Courtesy

More than 40 petrol stations in Turkana County have closed down owing to the fact the price setting regime under the Energy and Petroleum Regulatory Authority (Epra) has made business untenable.

The fuel stations, located in far-flung areas of Lokichogio, Kakuma, Lodwar, Lokichar and Kainuk, shut down leaving only five fuel stations operational in the county.

In its July 14 announcement, Epra set the maximum pump price in Lodwar at Sh131.85 for Super petrol and Sh112.64 for diesel but Turkana Fuel Proprietors Association (TFPA) says the prices leave  members with a profit margin of approximately Sh4 per litre which is not enough to sustain their businesses, pay taxes and meet operational costs.

“Here in Turkana we have very many challenges. Business is doing very poorly especially after the government started regulating fuel prices.

While it is okay to regulate fuel prices, they failed to involve us in determining the prices,” TFPA chair Richard Kibet said.

“We are going through a lot of challenges to ensure the fuel reaches the consumer. The Sh4 profit margin given to us by Epra is all consumed by the time the fuel reaches here.”

The association said its members have incurred heavy losses due to the current pump prices saying the cost of transporting fuel to the far flung region eats into their profit margins.

This comes as Epra plans to unveil its monthly cost estimates which will guide costs for the months of August and part of September.

Speaking in Turkana yesterday, Epra Director General, Daniel Kiptoo said the farther a station is located from Mombasa where the fuel is offloaded, the higher the transportation cost. 

“The cost of transporting fuel from Mombasa to Turkana is what is causing the differences in the pump prices in Turkana, Nairobi, Mombasa, and in the rest the country. But we are using a formula that ensures there is equity in matters fuel,” he said. 

The distance between Eldoret and Lodwar is over 400km, meaning that some proprietors in the county cover more than 700km to reach their customers.

Traders faulted Epra for not considering other costs such as security, escort, county charges (cess) and fuel loses due to temperatures variation when determining pump prices for such a region.

Left with nothing

They said while the difference in pump prices between the depot and Turkana is only Sh4.2 per litre, they pay a further Sh7 per litre to transport the fuel to Turkana.

“At the end of the day when you do your calculations you find that you are left with nothing,” Kibet said. 

The association said considering that Turkana County connects Kenya to Uganda, South Sudan and Ethiopia it would be disastrous if all petrol stations were to shut down their operations.

“We wrote to Epra several times requesting for price evaluation. They said they will reevaluate but time is running.

Several petrol stations were closed and the ones that are working are doing so for the sake of other businesses or they own the premises from which they are operating,” said Muhammed Ali Hajji, a trader. 

The association has given Epra a two week ultimatum to address the issue failure to which they will shut down operations completely.

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