Oil marketers in Kenya have warned of fuel shortages because of government delays in paying them the subsidies meant to keep prices of gasoline low.
The companies are owed 65 billion shillings ($542 million) for supplying fuel for the three months since June, they said in a letter to Kenya’s petroleum ministry as reported by Bloomberg News.
“The impact on oil marketing companies is so substantial that they will face immense financial constraints to be able to continue with uninterrupted supply. This letter, therefore, serves as a notification to the authorities on the imminent inability of the OMCs to meet their supply obligations unless there is prompt payment of the outstanding amounts.” the letter said.
The threat of shortages comes just months after Kenyans suffered its worst fuel crisis in a decade when motorists had to wait in lines for hours day and night to fill their tanks.
“Treasury is working on it to ensure OMCs have cash flows,” Daniel Kiptoo, director-general of the Energy and Petroleum Regulatory Authority, said by text message.
Currently, the government has spent 118 billion shillings to subsidize fuel prices since April last year. The subsidy is however set to end by December as the government said it is not sustainable.
