EPRA to tighten grip on fuel adulteration as kerosene prices drop
•The cost of kerosene dropped by Sh18 on Tuesday to retail at Sh77.28 in Nairobi
•While poor households rely on kerosene for lighting and cooking, most of kerosene was going to fuel adulteration prior to the Finance Act 2018
The Energy and Petroleum Regulatory Authority (EPRA) says it is ready to combat fuel adulteration given the decrease in kerosene prices.
The cost of kerosene dropped by Sh18 on Tuesday to retail at Sh77.28 in Nairobi.
“We have put in stringent measures to ensure Kenyans do not get substandard fuel,” EPRA director-general Pavel Oimeke told the Star.
While poor households rely on kerosene for lighting and cooking, the majority of kerosene was going to fuel adulteration prior to the Finance Act 2018.
The act saw the introduction of a 43.03 per cent excise duty per cent on kerosene, with importers paying Sh10,305 for every 1,000 litres up from Sh7,205 to curb fuel adulteration.
Currently, for every Sh77.28 paid for a litre of kerosene, Sh34.36 goes to the state as taxes and levies while the product’s actual cost is Sh27.56.
Prior to the Act, EPRA had established that out of the 33 million litres of kerosene used in the country monthly, only five million litres was actually going into lighting and cooking.
This means more than 81 per cent of kerosene was being mixed with petrol or diesel to profit rogue petroleum distributors, with the Kenya Revenue Authority losing approximately Sh34 billion in taxes.
According to the Petroleum Institute of East Africa, adulteration leads to untold suffering in terms of high maintenance costs of buses, matatus, farm machinery and trucks due to frequent breakdowns.
The high cost of maintenance is subsequently passed onto the public through public transport fares and logistics costs.
“Though there are still some pockets of it in unlicensed facilities, which are referred to as fuel dens, the extent of it has reduced significantly following the equalization of taxes between Kerosene and Diesel in 2018,” PIEA general manager Wanjiku Manyara told the Star.
She added that these illegal facilities need to be demolished as they also pose serious security and safety challenges to the country.
Oimeke, however, said that over the past year, fuel adulteration has dropped with a compliance rate of up to 99 per cent.
To ensure the price cut does not drive up adulteration, the authority is ensuring any orders for kerosene are cleared by EPRA at the dock.
EPRA also has a team conducting testing around filling stations to ensure the fuel being sold is not doctored.
“If anyone is found having adulterated fuel, their licenses will be revoked for a year,” Oimeke said.
Traders in doctored fuel also face a penalty of up to Sh10 million and imprisonment as dictated in the Energy Act 2019.
Data by the Kenya National Bureau of Statistics shows the country’s kerosene consumption has more than halved to 168.3 million litres last year compared to 339.38 million litres in 2018.
“We have seen a really great improvement over the past year,” Oimeke said.
He added that the cost of diesel is also set to drop significantly in the coming months, minimising the need for adulteration.
