This archive report was first published on 18 July 2020.
As the Christmas period kicked in, the Energy and Petroleum Regulatory Authority (EPRA) announced new profit margins for petroleum products retailers in November 2019, raising the retail operations margin per litre of fuel from Sh3 to Sh4.14.
However, just six months later, the promise of enhanced profits has diminished as retailers battle with oil marketing companies and EPRA over new charges that have wiped out the Sh1.14 increment and more.
The Kenya National Petroleum Dealers Association (KENAPEDE) has taken EPRA to court, seeking to have the regulator enforce its laws and regulations.
‘The applicant submits that the 2nd respondent (EPRA) has by its action to ignore the ex parte applicant’s grievances contained in its several letters amounts to a breach of its statutory duty towards the applicant who is a stakeholder in the petroleum industry, and the failure to address its grievances has caused its members to suffer through being subjected to low retail operating margins due to manipulations by the oil marketing companies,’ the association says.
The dispute over profit margins is one among several issues the retailers have locked horns with oil marketing companies and EPRA over.
For instance, retailers have accused the regulator of failing to take action on fuel losses during delivery of up to 350 litres per order, and complaints over intimidation by oil marketing companies.
EPRA did not respond when Sunday Nation reached out to them.
According to court papers, oil marketing companies have introduced new charges such as working capital charge, Health Safety, Environment and Quality (HSEQ) charge, digital charge, research and development, training and assistance charge, and through-put charge.
These charges have wiped out the Sh1.14 increment and more, leaving retailers with margins as low as Sh3 per litre, contrary to the Sh4.14 prescribed by EPRA in the new regulations published in November 2019.
The matter will be coming up for mention on Tuesday.
Petroleum price controls started in December 2010 when the maximum margin per litre was set at Sh6 at wholesale and Sh3 at the retail level.
