Fuel shortages being reported in parts of Kenya are largely the result of supply chain disruptions between oil marketers and retailers, according to economist Churchill Ogutu.
Speaking during an interview with ARISE News on Thursday, Ogutu explained that the challenges in Kenya’s downstream petroleum sector stem from logistical and pricing issues affecting the relationship between oil suppliers and retail outlets.
He noted that the structure of the sector places oil majors as suppliers, while retailers depend on them for product distribution, creating a bottleneck when supply terms become unfavorable.
“What has happened, we are seeing that the oil majors are not supplying the oil to the retailers, or they are supplying it at a retail price,” he said.
According to him, this situation makes it difficult for retailers to operate profitably, as they are unable to maintain their usual margins.
“So the retailers are not able to make the margins that they typically would make… that is where the logistical hurdle is coming,” he explained.
Ogutu revealed that about 20 percent of petroleum retailers are already affected, with some unable to access supply, leading to emerging shortages in certain areas.
“Twenty percent of the retailers are right now impacted… they’re not receiving the supply, and also there’s some fuel shortages that has been reported,” he said.
He warned that the situation could worsen in the coming weeks if supply challenges persist, particularly if delays occur in fuel imports handled by oil majors.
“Looking ahead in the next two weeks, one month, if this crisis is protracted… we are not expecting some deliveries coming on board,” he noted.
Ogutu added that such disruptions would affect both suppliers and retailers, further tightening fuel availability across the country.
Despite concerns about alarmism, he maintained that the warnings raised by industry stakeholders are valid and should be taken seriously.
“That is… he is raising some legitimate concerns. Yes, we are seeing fuel shortages arising in the Kenyan market,” he said.
He emphasized the need for swift intervention to stabilize supply and prevent a broader crisis in the energy sector.
Triumph Ojo
