KPC seeking funds to construct storage facilities in a bid to reduce fuel prices

NAIROBI, Kenya, Sep 28 – The Kenya Pipeline Company Tuesday said it is seeking funds from the National Treasury that will enable the construction of Liquid Petroleum gas tanks which will subsequently aid in reducing fuel costs.

KPC Managing Director Macharia Irungu, while appearing before the Department Committee on Finance and National Planning, said that will the tanks will help in the storage of fuel for up to 30 days should this be implemented in the next 2-3 years.

“What we are looking for is capital to start building because, at the end of the day, we need permission from the Government, KPC has been applying but has not been granted,” he said noting that KPC is seeking to build one billion litres of tankage yearly.

Irungu further added that despite the increase in fuel prices, tariff for storage has reduced over the years admitting that the agency failed to take advantage of the low prices during the Covid period.

The Parliamentary committee was probing the cause of the drastic increase in the price of Petroleum and Petroleum Products.

“The current tariff set by EPRA came into effect from 15^th February 2020 and covered a three-year period, 2019/2020 -2021/22,” Irungu told the committee.

This comes in the wake of increased criticism on petroleum bodies over increased prices of gas and fuel.

For instance, EPRA Director-General Daniel Kiptoo was also forced to give submissions to National Assembly Finance Committee regarding two petitions challenging the increase in the cost of fuel.

According to EPRA, the hike in fuel prices in the country is as a result of increased landing costs and multiple levies charged under the existing legislative framework.

Even with the increase in fuel prices globally, the EPRA pointed out that the status quo will remain as the framework for the cost formula used to determine prices is guided by a summation of levies, taxes and the actual supply chain.

The authority explained to the committee that the oil market is quite unpredictable and extremely prone to sudden shocks depending on the global market.

EPRA officials said the agency had worked in collaboration with the Ministry of Petroleum and Mining in developing Petroleum (Petroleum Consolidated Fund), Regulations 2021 and Petroleum (Strategic Stocks), Regulations 2021   meant to ensure strategic stocks in the country should shortage of fuel occur globally.

“Petroleum strategic stocks can help cushion the country from the shocks of escalating and deescalating prices in the international markets,” he said.