Petroleum Merchants Favor Dar Es Salaam Over Mombasa Port Due to High Pipeline Tariffs Preferring Truck Transport.
The high tariff of USD60 (Ksh6, 000) per 1,000 liters of fuel transported through the Kenyan pipeline is costing the state in terms of revenue as landlocked counties seek alternatives to Tanzania.
Kenyan petroleum exports have dropped in value by 43 percent from Ksh2.1 billion in the initial six months of the year 2018 to Ksh1.2 billion in the first half of the year 2019.
Data to show the balance of payment taken by the Kenya National Bureau of Statistics shows that the exports have gone lower than Ksh2.4 billion for petroleum products since 2017.
Oil marketers pay an average of USD80 (Ksh8, 000) to ferry oil from Dar es Salaam by using trucks but only pay USD60 (Ksh6, 000) tariff when using the pipeline to Kisumu and an added cost of USD35 (Ksh3, 500) on trucks to buying States.
Oil merchants have been telling the government that the tariffs provided where too high and see trucks being a better alternative to pipelines since they end up saving around USD20 (Ksh2,000).
The Kenya Pipeline Company (KPC) said the tariff is under review by Energy and Petroleum Regulatory Authority (EPRA) and if there is an issue the rates will be reduced.
Check out our GBS TV blog post for more trending news.