Nakuru traders fault KPC's new tariffs for huge losses

Kenya Pipeline Corporation (KPC) has been faulted for its decision to review fuel tariffs at the Nakuru depot, which have led to relocation of export fuel services to Eldoret and Kisumu depots.

The move by fuel exporters to shift to Kisumu and Eldoret depots came about after the government standardised fuel tariffs for all depots to Sh56 per litre.

Initially, the tariff for Nakuru was Sh 45 per litre and Sh59 for Kisumu.

John Mututho, a candidate in the Nakuru governor race, termed the decision as unfair, saying many people have invested their businesses around pipeline depot

He asked the Ministry of Energy to rethink the decision, saying the businesses around the depot in Nakuru were going to suffer huge losses due to the heavy investments they had made.

Mr Mututho said KPC ought to have consulted with the leaders and the business community in Nakuru County before taking the decision.

Kenya Pipeline later on Thursday agreed to review the promotional tariffs, after a meeting with petroleum exporters in Nakuru who cited huge losses by local business operators.

Shrunk businesses

Since the introduction of the new tariff, very few export tankers have been drawing fuel from the Nakuru depot, leaving it to mostly local fuel dealers.

Business around the facility has shrunk, and only last week, creditors repossessed more than eight fuel tankers from dealers.

Locals say many restaurants that had opened up in the area have since closed down since their business had been affected.

Hoteliers said that majority of their customers were truck drivers but business has since gone down.

“Most of the lodgings in the area have also been recording fewer clients compared with before,” said Mr Peter Mwangi, a landlord.

“We have seen cases of crime increase in the area as the youth in the area are now idle,” said Mr Erastus Kimondo, an area resident.

Shift depots

Fuel exporters to Uganda and central Africa countries now prefer to use Kisumu and Eldoret deports in order to reduce expenses.

Earlier on, KPC Corporate Communications Manager Jason Nyantino defended the decision to standardise the tariffs and stated that the company had expected the reactions from locals.

“Politicians and locals will complain but they should understand that this is business and it is dynamic and so they should allow the change to take place.

"Our intention is not to hurt them but Kenya must grow through embracing use of pipeline for more efficiency,” said Mr Nyantino.

He said this was the only way to see Kenya grow economically.