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Shipping & Logistics

Truckers eye more regional business after oil tariff cut

Oil tankers delivering fuel to Uganda queue at Busia-Kenya border. FILE PHOTO | NMG
Oil tankers delivering fuel to Uganda queue at Busia border in Kenya. FILE PHOTO | NMG 

Truckers expect to transport more oil cargo from Kenya to other countries in the region after a reduction of pipeline tariffs made the petroleum products sourced from the local market more competitive.

The Kenya Pipeline Company (KPC) in November implemented new pipeline tariffs aimed at cutting fuel prices.

In the changes, KPC reduced their fuel transportation costs from Mombasa to Kisumu from $54 (Sh5,473) per 1,000 litres to $30 (Sh3,040) per 1,000 litres.

Siginon Group managing director Meshack Kipturgo said the lower tariffs had upset distribution patterns in Kenya and the region and would boost the truckers’ business despite competition from standard gauge railway (SGR).

“You will start seeing trucks move from Tanzania to Kenya. KPC is now attracting a lot of fuel into the northern corridor,” said Mr Kipturgo. He added that the tariff reduction would see a lot of fuel which has traditionally been transported from Dar es Salaam to Uganda start coming from Kenya, boosting truck business.

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“A lot of what was moving from Dar to Rwanda is likely to be moved from Kisumu and Eldoret to Rwanda. You will see a lot of the SGR-displaced trucks having work via Eldoret and Kisumu.”

This will be a boost to a sector which last year faced competition from SGR especially with government at one point ordering all importers to use rail as opposed to trucks in moving their goods.

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