TotalEnergies Marketing Kenya has clashed with the distributors of its lubricant products amid claims of changes to the contract terms.
In letters seen by the Business Daily, the distributors claimed that Total has set fixed targets on the volumes of lubricants sold every month, exposing them to losses given that there are high and low seasons. The French oil firm has also removed incentive rebates for some products.
The distributors claimed that the new terms would significantly eat into their monthly sales amid tough economic times where customers are grappling with a thinning ability to buy goods and services.
“Additional incentive rebate will be effected M+1 (next month’s contract) as defined in the table below upon achieving the defined bunded volume. No rebate incentive will be given for below 83 percent achievement of volume,” Henry Kwame, the Commercial Manager for Specialties at Total, says in a letter dated April 2, 2025.
The French firm informed the distributors of the new contract terms which came into effect from April 1, 2025, and will be in force up to the end of this year.
“This is to bring to your attention that we received the above-titled letter and after going through it, we had concerns and thought it was a good thing to bring them to your attention,” one of the distributors says in a response letter dated April 7, 2025.
“It is punitive to remove discounts on products when the economy of the country is negatively affected. This will affect our business very negatively in terms of earnings.”
Total had not responded to an emailed request for comment by press time.
Correspondence seen by the Business Daily shows that Total has, for example, removed the incentive rebate on the Hi-Perf Bajaj Boxer oil in what the distributors say is likely to hit sales of the commodity. In total, 14 types of lubricants have been affected in the new contracts.
The letters show Poa Energy, Mau Summit General Supplies, Tajiline Capital Investments, and Mko Kenya Limited have received the new contracts.
Under the agreement, distributors acquire warehouses, and delivery vehicles and hire salespeople while Total complements these by providing fuel at Sh4 for every litre of volume lifted per month to support last-mile delivery of the products.
Total is locked in a tight fight with Rubis and Vivo Energy for a share of the local fuel and lubricants market.
The latest industry by the Energy and Petroleum Regulatory Authority shows that Total had a market share of 14.53 percent behind second-placed Rubis at 15.96 percent and Vivo Energy at 21.34 percent of the fuel market.
The energy regulator does not provide data on the lubricants but the three oil firms dominate the market, given that most of their fuel customers use their branded lubricants.
