September 6, 2018 / 11:19 AM / 7 months ago

Kenya cancels import licence for fuel dealers over strike

NAIROBI (Reuters) - Kenya’s energy regulator said on Thursday it had cancelled a petroleum products import licence for the country’s main dealers’ association, accusing its members of intimidating other transporters as part of a strike against a new fuel tax.

FILE PHOTO: Petrol tankers are seen parked along the roadside during the beginning of an indefinite strike in the industrial area, Nairobi, Kenya September 3, 2018. REUTERS/Njeri Mwangi/File Photo

Pavel Oimeke, the director general of the Energy Regulatory Commission, said authorities were working towards restoring full depot operations after the strike, which involved transporters blocking fuel depots, disrupting fuel distribution.

The strike by the Kenya Independent Petroleum Dealers Association (KIPEDA) started on Monday, with the suppliers seeking the cancellation of a 16 percent value added tax on petroleum products that came into effect on Saturday.

Their action of blocking fuel depots in the capital Nairobi and the port city of Mombasa and intimidating other fuel transporters has led to fuel shortages that have also hit other parts of the country, the Energy Regulatory Commission said.

“The members who are actually disrupting operations are the members of KIPEDA,” Oimeke said on privately-owned NTV television. “So we have issued a notice that we have cancelled their licence, and that is the licence for import.”

KIPEDA members control 55 percent of the retail market, while the rest is served by marketers such as Shell’s licensee Vivo Energy, KenolKobil (KENO.NR) and Total Kenya (TOTL.NR).

Officials from the association were not immediately reachable for comment.

Oimeke said the regulator was working with state security agencies to make sure any other transporter wishing to collect fuel from the various depots did so unhindered.

“Already, I can confirm that loading at the depots in Nairobi was going on as of late afternoon yesterday and we expect that the flow of products is going to the petrol stations,” he said, adding that KIPEDA could get its licence back on condition it did not interfere with other transporters.

“We don’t refuse they can go on strike, but it should be a peaceful demonstration not hindering others to load,” he said.

The fuel tax is part of a government bid to finance key priorities while narrowing a fiscal deficit that could jeopardise a deal with the International Monetary Fund.

National Treasury Cabinet Secretary Henry Rotich was on Thursday holding a meeting with members of parliament to try and resolve the imposition of the tax, which has already triggered a hike in transport prices.

Reporting by George Obulutsa; Editing by Emelia Sithole-Matarise

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