The New Regulations Bound To Alter The Oil Sector In Kenya

by Cynthia Kendeli  - February 10, 2023

Energy Regulatory Commission in Kenya is to alter the oil rules. The Energy Regulatory Commission announced its intention to issue new rules for importation and holding petroleum with an aim of eliminating speculators in the oil market. The new proposed changes in the oil and petroleum sector were to foster investment in the petroleum sector in Kenya. The rules in the oil industry have to be adjusted as they do not favour investments as they are.

The new rules to be issued by the Energy Regulatory Commission will also shift the oil storage mandate from Kenya Pipeline Company. There have been speculations of spectators and brokers interfering with the oil storage and distribution via the energy ministry in Kenya. To introduce these new regulations in this oil industry in Kenya will ensure reduced corruption, transparency in the oil sector in Kenya and encourage investors locally and from foreign countries.

There are around 67 oil retailers in Kenya with trading licences to distribute oil. Half of these fuel distributors and oil retailers in Kenya is bound to lose licences of trading when the new rules from the ministry of energy are gazetted.

Operators in Oil industry in Kenya had been given up to 1 January 2014 to comply with the ministry of energy new rules, which applied during the renewal of 2014 oil trading licences in Kenya.

Among the new rules introduced in the fuel and oil industry in Kenya, registered oil firms in Kenya must own at least 5 oil retail stations, or a petroleum depot in Kenya. In case an oil company in Kenya do not possess any of these, they should prove that they can sell at least 15 million litres of assorted fuels each year.

According to the new regulations in the oil industry in Kenya, an oil Company defaulting both of the two rules above for 2 consecutive months, the fuel company will get their trading licence downgraded for not less than one year.

All registered fuel firms in Kenya must comply with the agreements with the national pipeline in Kenya and the oil refinery. These agreements include prompt lifting of oil products in Kenya and maintaining dead stock which is popularly known as line fill of 500 m3 of diesel.

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