Cargo transporters feel heat of nationwide fuel shortageWednesday April 06 2022
The logistics sector is feeling the heat of a fuel shortage that has hit different parts of the country even as transporters who are stuck with cargo at the Port of Mombasa ask authorities to waive storage charges.
Transporters argue that some of their trucks cannot move cargo from the port as they do not have enough fuel to ship the consignments from the facility to the final destination.
The government and oil marketers have been on a back-and-forth over the arrears owed to oil dealers in the last couple of weeks, a move that has paralysed the transport sector in the country, especially in western Kenya where the deficit was acute.
The shortage has impacted not only on transport but also farming activities as farmers grapple with difficulties in getting diesel, which has coincided with the peak of planting season.
Chief executive of the Shippers Council Gilbert Langat said the shortage of fuel has had an effect on the shipping activities, just as it has had on other sectors of the economy.
“Of course the shortage has had an impact on movement of goods but the extent of the damage occasioned by this deficit can only be told in the coming days,” said Mr Langat.
Disruption in the transport sector is likely to lead to congestion at the port, attracting more storage charges as some cargo would not be evacuated within the required free storage period.
Mercy Ireri, the chief executive officer of the Kenya Transporters Association (KTA) said the shortage has affected their financial and operation planning, noting that some of their members have had to commit extra funds to fuel that they had not planned for.
“Some of the transporters have had to channel finances to unplanned fuel purchases because of the shortage and this has had a negative impact not only on cash but also operations,” said Ms Ireri.
Ms Ireri said transporters normally buy fuel in bulk but there are those that buy on a need basis and could have been hurt by the current shortage.
Mr Dennis Ombok, a logistics consultant and former CEO of the KTA says the Kenya Ports Authority (KTA) needs to give a waiver as an intervention to the current situation.
Costs waiver appeal
“The cargo take-up time will obviously be impacted by the ongoing shortage and we would want KPA to consider waiving storage charges in the light of the ongoing circumstances,” said Dennis Ombok, a former chief executive officer of Kenya Transporters Association.
KPA normally give free storage days or cargo owners as they prepare to ship it to their final destinations.
Mr Ombok noted that stations in Mombasa have been rationing fuel, making it impossible for trucks to get enough fuel that can last them a whole journey from the port city to Kampala and beyond.
The oil marketers are said to have gone slow in evacuating their products from depots to protest delays in the payment of subsidies to the companies.
The government says it owes the companies Sh13 billion, but dealers say they are owed in excess of Sh20 billion. On Monday the government released Sh8.2 billion to the dealers to cater for partial payments.
The State has said it will fine fuel marketers accused of hoarding petrol and diesel as it released the Sh8.2 billion subsidy arrears to ease nationwide fuel shortage and forestall a crisis.
Petroleum Principal Secretary Andrew Kamau said on Monday that investigations into the shortage were being finalised, setting the stage for financial penalties and licence withdrawals.
He added that the supply hitches that caused the nationwide fuel shortage are expected to ease from Thursday after oil marketers steeped supplies to stations from depots.