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Thursday, April 12, 2007

Why The Petrol Shortage In Kenya Will Get A Lot Worse

You arrive at a filling station with barely enough fuel only to be told the last thing you expected to hear. No fuel. The attendant is helpful and suggests a certain filling station right across town.

This is a common scene today in major towns of Kenya like Nairobi and Mombasa.
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Quip for the day;
We have a very simple choice as Kenyans in the forthcoming general elections; either we do what we have always done and elect the same guys back into office, or try something totally new and radical. Cancer is not dealt with in small measures, only radical surgery works.

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So why is there a fuel shortage when the government is still insisting that there is enough fuel in the country? The explanation given is that the pipeline, which transports fuel from the refinery in Mombasa to the rest of the country, is operating at full capacity but is unable to meet the demand. Minister of Energy Kiraitu Murungi says that Kenyans will have to bare with the situation until December when the Kenya Pipeline parastatal that owns and runs the pipeline will have been able to double the current capacity.

Actually the question we should be asking is what triggered the crisis? Supporters of President Kibaki will be quick to say that it is the rapidly expanding economy hungry for fuel. Unfortunately the answer is no as simple as that. Nairobi is a major hub of activity in the region. Countless relief organizations covering a vast area in the region are all based in Nairobi. Recently there has been an increase in these relief activities, more so as the world has suddenly started paying much more attention to the unfolding crisis in Darfur. There is also increased military activity triggered off by an ongoing campaign to mow down suspected terrorist cell activities in Somalia. This has led to an escalation of fighting in that country, which has once again necessitated increased humanitarian aid. Let us also not forget our very own Mt Elgon skirmishes where humanitarian aid activity has risen considerably over the last few weeks.

It is quite possible that a combination of factors has caused the demand for fuel to peak rather suddenly and that is what has triggered the current crisis.

However there is one thing we can all be sure of. And that is the fact that it is bound to get worse. The reason is simple. Many motorists in Kenya have the habit of moving around with barely enough fuel. Now with the crisis, most people will purchase as much fuel as they can when they do find it. This sudden "hoarding" on a massive scale will make the situation a lot worse.

But there is one question we need to ask Mr Kiraitu Murungi and the bureaucrats at the Ministry of energy. Could they not have seen this crisis coming long before it happened?

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4 comments:

  1. While perrenial fuel crises is a phenomenon prevalent the world over, our predicament is compunded with deceit and complacency.

    Fly across the Antlantic and see what a furore any slight disturbance of status quo in fuel (nay gas) supply causes. Even dreads the heat and the resrves were not designed for beauty pegeant shows.

    The present fuel crises will definitely slide from bad to worse owing to our leaders' propensity to spare no effort in offering long term leadership for prosperity. All their guns are singularly trained at cheap politicking. Nothing could epitomize management by crisis better.

    At the risk of stiring the wrath of the present regime's sympathizers, their hollow justification of growth that is shamelessly premised on tokenism won't wash. Kenya and Kenyans deserve more and not comparisons with ruined era gone bye thanks to Moi and Kenyatta.

    And lest we forget, fuel and sugar are prime candidates for ecomomic fraud. Being and election year, it would be naive not to see the hand of the poltically correct angling to make hay when the sun is still up. My dear countrypeople, we are in for a rude shock and Mt. Elgon clashes is just the prefeace to the brutal and insensitive thriller as December approaches. Who will save Kenya from herself?

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  2. I see the hand of mainstream oil marketing companies in this artificial shortage. It has been their wish to see the Mombasa refinery shut-down so that they may be granted licences to import refined (finished)products directly from the middle east so as to reap maximum profits. It is the same cartel that has been controling oil prices despite threats from a helpless Minister for Energy.

    Government must be congratulated for compelling oil marketers to import crude oil and have it refined at the mombasa plant. Government must also put efforts in sourcing for serious investors who will finance the upgrading / expansion of this refinery (estimated at Kshs. 15b) as it is very strategic in the long term to Kenya and the region. Kenya Pipeline infrustructure must also be upgraded to meet distribution and supply demands nationally and regionally.

    Bear in mind the search for oil continues along the Kenyan coast and elsewhere and it will be ironic to have Kenyan crude oil refined in a foreign country if KPRL is shut down now, not to mention the loss of jobs, etc.

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  3. Phil... stop expounding the hackneyed line... read my post on the idiocy of government policies that have led to the "shortage"...

    First, the pipeline should have been expanded & extended years ago. It would save wear & tear on our roads.

    2nd - KPRL is inefficient. Either it needs upgrading or it needs to be shut down. It makes no sense to pay 2/- extra coz of inefficiency. Loss of jobs? Please don't make me laugh! The savings would increase jobs in other sectors!

    Would you like us to ban computers so we can have more bookkeepers?
    How about saving librarian's jobs by outlawing the internet search engines?

    3rd - I do advocate an upgraded refinery using PRIVATE funds.

    4th - Slow refunds of VAT & duties are killing our industries. At the same time they increase the costs to consumers. Oil Marketers borrow BILLIONS while the govt is sitting on their refunds. The extra "interest cost" is passed onto consumers!

    www.coldtusker.blogspot.com

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  4. Cold Tusker, its an open secret oil marketers have reaped enough profits from helpless kenyans for too long. Its also an open secret they want the refinery closed for commercial reasons. Private funds yes, but the GoK has to provide the gurantees for paying back the loans. besides the GoK is a majority share holder at the refinery and nothing will move without government go-ahead. KPRL could be inefficient, but it is what is called a strategic industry. Close it now, and later experience what the Government of South Sudan (GOSS) is experiencing as oil in mined in the south, but has to be refined in the north - and considering a war might break out anytime, GOSS will be left with crude oil and no refinery nor infrustructre to send it elsewhere, eg. nearest refinery is KPRL! The commissioner of VAT and Large Tax payers will tell you how VAT cheques were diverted to private accounts before new rules were implemented. Let oil marketers play a fair game - and government will be fair to them!

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