Kenya Pipeline Company managing director Joe Sang. FILE PHOTO | NMG
Summary
- Pipeline costs for products headed to Rwanda, Congo, Uganda, Burundi and South Sudan from the Port of Mombasa reduced to $44.55 (Sh4,579) per 1,000 litres, up from $59.32 (Sh6,098).
- KPC said the lower tariff helped increase Kenyan exports by 20 per cent, with Tanzania emerging a loser.
- KPC in April said it had lost it's market share in Rwanda and Burundi, which have an alternative transit route via Tanzania.
Kenya Pipeline Company Limited (KPC) is
considering a permanent tariff cut on fuel to neighbouring countries in a
bid to regain business lost to Tanzania.
KPC launched a
promotional tariff in April that reduced pipeline fees by a third. It
is now seeking to make the tariff permanent.
Pipeline
costs for products headed to Rwanda, Congo, Uganda, Burundi and South
Sudan from the Port of Mombasa reduced to $44.55 (Sh4,579) per 1,000
litres, up from $59.32 (Sh6,098).
KPC said the lower tariff helped increase Kenyan exports by 20 per cent, with Tanzania emerging a loser.
“The
company will be reviewing the tariff in the next few weeks with a view
to determining if we can make it permanent,” KPC Managing Director Joe
Sang said on Friday.
'Grow volumes'
“The
market has received the tariff well and our expectation is to grow our
volumes by an additional 30 per cent before the end of the year.”
Countries such as Rwanda and Burundi had stepped up
fuel imports through Tanzania’s main port in Dar es Salaam, arguing that
Kenya’s route was expensive and experienced contamination of cargo.
Mombasa
faces increased competition from neighbouring Tanzania, where the
government is expanding the Dar es Salaam port and plans to spend $10
billion building a new one at Bagamoyo, 52 kilometres (32 miles) north.
KPC in April said it had lost it's market share in Rwanda and Burundi, which have an alternative transit route via Tanzania.
The
quest for a larger share of the oil export business comes amid a trade
spat between Dar es Salam and Nairobi that has seen Kenya block entry of
gas and wheat from Tanzania.
Mombasa
is a gateway for imports to Rwanda, Burundi, Uganda, South Sudan,
Eastern Congo and northern Tanzania and is also an exit point, mainly
for agricultural commodities such as tea and coffee.
While
Kenya’s economy has been dominant in the region for decades, Tanzania,
which is geographically bigger and holds vast quantities of gold and
gas, is vying for more economic and political sway.
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