Tough Penalties Loom as Regulator Targets Oil Firms Over Fuel Hoarding

The Competition Authority of Kenya (CAK) has cautioned oil marketing companies against the alleged hoarding of fuel products. This move follows reports of localized shortages despite adequate stocks being available within the national supply chain.

The regulator noted that some players may be deliberately withholding products to influence market dynamics. This practice often precedes anticipated price adjustments or is used to create an artificial sense of scarcity to justify higher costs.

The CAK stated that companies found culpable of these restrictive trade practices risk heavy penalties. Under the Competition Act, firms can be fined up to 10 percent of their annual turnover. Individuals involved in these decisions also face possible imprisonment.

Public outcry has grown in recent weeks as motorists in various parts of the country reported difficulty accessing petroleum products. This is occurring despite the Energy and Petroleum Regulatory Authority (EPRA) maintaining that there is sufficient fuel at the depots.

Hoarding is considered a serious violation of fair-competition laws in Kenya. The CAK is mandated to protect consumers from such exploitative behaviors that distort the economy and disrupt essential services.

The authority has now deployed its surveillance teams to monitor the supply chain more closely. They are tracking the movement of fuel from the main storage tanks to the retail stations across the country.

Industry stakeholders have been urged to comply with the set regulations to ensure a steady supply to the public. The regulator emphasized that any coordinated attempt to starve the market of fuel will be met with the full force of the law.

The energy sector remains a sensitive pillar of the Kenyan economy. Any disruption in fuel supply has an immediate ripple effect on transport costs, food prices, and manufacturing.

President Ruto’s administration has previously emphasized the need for stability in the energy sector to drive economic recovery. Regulatory bodies are now under pressure to ensure that private players do not sabotage these efforts through unethical business practices.

In past instances of fuel shortages, the government has moved to audit the stocks held by major oil marketers. Those found to be holding back fuel while the public suffers have faced administrative sanctions and threats of license revocation.

The CAK has invited members of the public to report any cases where petrol stations are refusing to sell fuel despite having visible stock. Such reports are vital for the authority to build evidence against non-compliant firms.

While some marketers cite logistical challenges, the regulator maintains that these should not lead to widespread or prolonged outages. The focus remains on ensuring that the competitive environment is not compromised by a few dominant players.

The current warning serves as a final notice to the sector. The CAK intends to collaborate with other agencies, including EPRA and the National Police Service, to enforce compliance at the pump.