Kenya’s top three oil marketers lose 20 per cent market share

Kenya’s top three oil marketers lost a combined 20.6 per cent share of local petroleum market sales in the second quarter of the year, eroding gains reported the year before.

Data from the Petroleum Institute of East Africa (PIEA) shows that Total Kenya, Vivo (Shell) and KenolKobil had a market share of 51.3 per cent in the three months ended June.

This was a drop from a share of 71.9 per cent a year earlier, which nearly matched their previous peak of 77.9 per cent in 2007.

The performance, amid increased sales of petroleum products, indicates the rise of smaller oil marketers such as Tosha, Bakri and One Petroleum that have increased their investments in fuel stations around the country.

Total recorded the largest market share drop of 9.7 percentage points to 18 per cent in the review period, followed by Vivo which declined by eight percentage points to 17.8 per cent.

That of Kenol dropped by 2.9 percentage points to 15.5 per cent. Local sales have become more important for the Nairobi Securities Exchange-listed firm which earlier in the year exited Tanzania and the Democratic Republic of Congo which it said were not profitable.

The move scaled down its regional operations, leaving it with the local market and Burundi, Ethiopia, Rwanda, Uganda and Zambia.

Exports of petroleum products to the region have also reportedly dropped significantly in what is likely to affect Kenyan oil dealers in general.

Despite the reduced local market share, Total, Vivo and Kenol retain their position as the top oil marketers, in that order. Besides the three firms, other significant oil dealers also saw their market share shrink including OiLibya whose portion of local fuel sales dropped to 5.8 per cent from 8.8 per cent.

READ: Total, Shell cede market share to smaller oil firms

Bakri was among the small dealers to grow its market share which doubled to 2.6 per cent from 1.3 per cent.

One Petroleum also posted a 2.8 per cent market share from less than 0.3 per cent, while that of Tosha rose to 1.3 per cent from 1.2 per cent.

The small firms were the biggest beneficiaries of increased demand for petroleum products in the country that has been driven by lower prices of the commodities in the wake of a global glut.

Data from PIEA shows that local sales of petroleum products increased 30 per cent to 2.9 million cubic metres in the half year ended June, compared to 2.2 million cubic metres the year before.

Lower prices of petrol, diesel and kerosene saw increased consumption of the products, lifting volume sales.

The price per litre of petrol in Nairobi, for instance, ranged between Sh80.7 and Sh88.64 in the period compared to the previous year when it ranged between Sh84.71 and Sh97.28.

Oil marketers that gain market share with a minimal increase in costs stand to post higher margins in a market where prices are capped by the Energy Regulatory Commission (ERC).

Kenol, for instance, has retired a substantial part of its bank loans in line with its strategy of using minimal borrowings to save on finance costs.