Kenya fuel retailers running short of supplies due to Middle East war

The head of Kenya’s independent fuel retailers told Reuters that hundreds of dealers are running short due to the Iran war, saying about 20% ​of the outlets were affected after the regulator froze pump prices ‌despite rising global oil costs.

Dealers are likely to start hoarding petroleum products in anticipation of consumer fuel price hikes next month, said Martin Chomba, chairman of the Petroleum Outlets Association of ​Kenya (POAK).

African countries are among the most exposed to both supply disruptions and higher ​prices after the conflict all but halted shipments of about one-fifth ⁠of the world’s oil and liquefied natural gas through the Strait of ​Hormuz.

Kenya obtains all its fuel supplies from the Middle East through government-to-government deals with ​Gulf crude producers and refiners.

“We have constrained supply,” said Chomba, whose association represents independent retailers, transporters and others, serving 68% of the national market.

“So far, about 20 per cent (of some 3,100 ​retailers) are affected. In two weeks, it will be a total crisis with no ​fuel in most outlets if the tension in the Middle East continues.”

On March 14, the ‌state-run ⁠sector regulator, the Energy and Petroleum Regulatory Authority (EPRA), left pump prices for petroleum products unchanged for the next 30 days despite the spike in international crude oil prices.

“Real shock is on the way,” Chomba said, referring to the possibility of ​hoarding. He added ​that POAK had ⁠been pressing authorities in Nairobi to end the government-to-government deals and allow fuel marketers to purchase products from private suppliers ​as a contingency measure.

EPRA Director General Daniel Kiptoo Bargoria told ​Reuters that ⁠Kenya had “sufficient stocks”, adding that the regulator would issue a statement later on Tuesday.

A ruling party lawmaker, Nelson Koech, said on Monday that “speculation, panic buying, and hoarding… ⁠particularly hoarding ​by oil marketers in anticipation of a price ​jump” had seen demand jump over the past two weeks, affecting access to supplies.