Vivo Energy, the retailer of Shell-branded fuel products, has emerged as the top oil marketer in Kenya in the year ended December after knocking Total #ticker:TOTL off the pole position.
Data from the Petroleum Institute of East Africa (PIEA) show that Vivo’s share of local petroleum sales volume rose to 17.6 per cent in the review period, up from 15.9 per cent the year before when it was ranked second.
Total’s share dropped by 0.1 percentage points to 15.9 per cent, relegating it to the third place after KenolKobil #ticker:KENO which retained its position as the second largest petroleum dealer after gaining 1.1 percentage point to 16.5 per cent.
The rise of Vivo is linked to aggressive opening of new service stations. The company has in the past few years opened scores of fuel stations across the country including major towns such as Nairobi, Meru, Kisii and Thika.
Vivo’s parent company, based in Amsterdam, says it will continue with the expansion of its retail network across Africa.
“Vivo Energy plans to expand and develop its retail network in existing markets by building new service stations, acquiring new sites and upgrading existing retail service stations to fulfil unrealised potential,” Vivo Energy told the London Stock Exchange (LSE) and the Johannesburg Stock Exchange (JSE) where it plans to list in May.
The multinational said it opened a new service station every three days between 2015 and last year across its 10 markets in Africa. A wider footprint is seen as critical in driving sales of products like diesel, petroleum and kerosene to motorists and households.
Big oil marketers in Kenya have more retail outlets compared to their smaller rivals.
The absence of major price wars due to government price controls means market presence and strategic locations are key factors in winning customers who don’t have to seek bargains at various outlets.
Besides motor vehicle fuels, the other major market share driver is bulk sales to small independent oil firms, emergency power producers and airlines. A bigger market share boosts earnings through high sales volumes.