Top three oil firms lose local market share to smaller rivals

Total Kenya has emerged as the biggest domestic market share loser for the three months to September when the top three oil marketers — including Shell and Kenol Kobil — shed a combined 2.8 per cent market share.

Data from the Petroleum Institute of East Africa (PIEA) shows that Total lost 1.3 percentage points to close the period at 16.7 per cent and retain its position as the country’s top oil marketer.

Vivo, which trades locally as Shell, is ranked second having shed 1.2 percentage points to have a 16.6 per cent share while Kenol Kobil shed the least share (0.3 percentage points), ending the period with 15.2 per cent.

Gulf Energy, a small oil marketer which has been operating locally for a decade, was the only oil firm among the top seven companies to gain market share in the period under review, underlining a shift in the industry.

Gulf Energy grew rapidly in the recent past and now runs fuel stations in most major towns in the country besides having a presence in the East African region.

“Kenya registered an increase of approximately 20 per cent in fuel consumption up to September this year compared to the same period last year,” said Wanjiku Manyara, PIEA’s general manager.

“This year, good progress has been made in optimally utilising petroleum infrastructure and increasing the existing ones. The industry is optimistic that once all the crucial infrastructure projects are completed, supply constraints will be a challenge of the past.”

Kenya’s top three oil market rivals are competing on customer convenience and wider distribution networks to grow sales, with some also running promotions and small discounts on their loyalty cards.

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

A wider footprint is critical in driving sales of products such as diesel, petroleum and kerosene to motorists and households. The bigger oil marketers have more retail outlets than their smaller rivals.

State controls have tamed price wars among the companies, making market presence and strategic locations key factors in winning customers who don’t have to seek bargains at various outlets.

Smaller oil marketers have however been investing heavily in the local and regional petroleum business, mirroring the strategy employed by their established rivals.

Their expansion has therefore loosened the top three firms’ grip on the Kenyan market. They at one point controlled over two thirds of the market.

OilLibya, which is ranked fifth after Gulf, also lost 0.2 percentage points to end the period with a market share of 5.6 per cent.

The National Oil Corporation of Kenya ceded 0.5 percentage points to close September at 4.9 per cent market share. Hashi Energy was seventh with 3.7 per cent market share, having lost 0.4 percentage points.