A filling station attendant fueling a car.
Tuesday’s rise in diesel prices by the widest margin in over a decade
to retail at Sh91.87 per litre in Nairobi has triggered fresh fears that
fuel may be adulterated using kerosene. PHOTO | FILE | NATION MEDIA
GROUP
Tuesday’s rise in diesel prices by the widest
margin in over a decade to retail at Sh91.87 per litre in
Nairobi has
triggered fresh fears that fuel may be adulterated using kerosene.
Paraffin,
which now retails at Sh65.45 per litre, has left a Sh26.42 per litre
margin between the two products, an attraction for unscrupulous dealers
who mix it with diesel to gain from the price margin.
The
wide margin pushed the government in September last year to introduce a
Sh18 per litre anti adulteration levy on kerosene to discourage the
practice but the margin has since returned, doubling from last month’s
Sh13 per litre. The difference is now even wider compared to the period
just before the adulteration levy was introduced when the two products
had Sh17.8 per litre difference (August 2018).
Petroleum
Principal Secretary Andrew Kamau said the wide price difference is only
temporary since there has been reduced import of kerosene in the last
two months, allaying fears that the margin may bring back adulteration
in the market.
“Kerosene was not imported
in the last cycle and it has been coming in reduced volumes before then,
that is why we have that difference which is only temporary and will
normalise once we have more kerosene being imported at the current
international crude oil prices,” Mr Kamau said in an interview
yesterday.
Kerosene prices surpassed those
of diesel in December and January, before the trend was reversed in the
subsequent months except May when diesel recorded a Sh19.19 drop.
WIDE PRICE MARGIN
Existence
of a wide price margin between diesel and kerosene although expected to
be temporary could send authorities back to the drawing board to
increase market policing to tame the menace.
The
challenge comes barely two months after the Energy and Petroleum
Regulatory Authority pointed at the possibility of a new adulterant
being used by fuel cartels to increase margins and evade taxes.
Potential risk
EPRA
Director-General, Pavel Oimeke, said the authority was concerned that
the cabal could be using another by-product of oil and gas production
called condensate largely available in Tanzania and which is easy to
import.
POTENTIAL RISK
“EPRA
is aware of the potential risk of use of condensate as an adulterant
especially with increased natural gas production in Tanzania. EPRA will
continue being vigilant to ensure that condensate produced as a
byproduct of the natural gas extraction process is not imported into
Kenya and used as an adulterant,” Mr Oimeke said in late May.
While kerosene is largely used to adulterate diesel only the condensate is also said to be used for mixing with petrol.
Adulterated
fuel results in dilution of lubricating oil in engines causing high
rate of motor wear and poor performance according to a study
commissioned by the Indian government in 2011. The practice was so
rampant in the Asian country that used vehicles and spares from the
market became very unattractive.
The Kenyan
cartel had one time shifted to using Jet A1 fuel to adulterate diesel
when kerosene prices shot up but the controlled import of the commodity
meant that they would only rely on the little they could lay their hand
on from transit jet fuel dumped within the country.
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