• Last week, airlines taking off from Jomo Kenyatta International Airport (JKIA) in Nairobi were forced to fly to neighbouring airports for fuelling after the country’s stocks of jet fuel neared depletion.
  • Oil marketers insist that they imported sufficient stocks to service the aviation sector, terming the 51 million litres jet fuel shortage as a crisis of KPC’s making.
  • This is the second time in under six months for KPC to face stock queries after another Sh1 billion stock difference prompted an audit of the State agency’s systems.

The Kenya Pipeline Company (KPC) is at a loss to explain how 51 million litres of jet fuel valued at over Sh2.4 billion ($240 million) disappeared into ‘thin air’.

Oil marketing firms in the country are at loggerheads with the state corporation over the alleged loss which triggered last week fuel crisis at the Moi and Jomo Kenyatta international airports.

A Kenya Airways plane at JKIA.

Last week, airlines taking off from Jomo Kenyatta International Airport (JKIA) in Nairobi were forced to fly to neighbouring airports for fuelling after the country’s stocks of jet fuel neared depletion.

While fuel imports ordinarily “shrink” due to evaporation and leakages in the transportation and storage system, oil marketers have often differed with KPC on the allowable extent of losses.

Oil marketers insist that they imported sufficient stocks to service the aviation sector, terming the 51 million litres jet fuel shortage as a crisis of KPC’s making.

A pump attendant fuels a commercial jet before take off .

In a letter to KPC, the oil companies’ Supply Co-ordination Committee says there is a significant difference between the amounts of jet fuel stock reflecting in books compared to what is in the KPC system.

The letter was written in response to a March 4 letter by KPC to OMCs stating that it had only 10.52 million litres of jet fuel in stock, accusing marketers of not placing enough orders to match demand.

We wish to advise that this reported low Jet A-1 stocks and looming fuel crisis within KPC system is not clear to us,” wrote the oil companies.

Oil marketing firms in the country are at loggerheads with KPC over the alleged loss of $240 million worth of jet fuel

They argued that as of March 4, the total loadable stocks held by all OMCs was 29 million litres. This, they say, added up to 61.78 million litres of jet fuel stocks imported when added to a line-fill quantity of 32.78 million litres.

It is therefore evident that there is a huge variance between KPC books and the physical stocks,” says the OMCs.

The 51.26 million litres variance of our jet stocks in the KPC system requires an explanation from KPC as we have already imported this stock and discharged it into the KPC system and the same confirmed by your records.”

Kenya Pipeline Headquarters on Nanyuki Road in Industrial Area Nairobi County

This is the second time in under six months for KPC to face stock queries after another Sh1 billion stock difference prompted an audit of the State agency’s systems.

On Wednesday, KPC board held a morning meeting over the matter that now risks sparking conflict between it and oil marketers.

KPC chairman John Ngumi

KPC chairman John Ngumi said the firm cannot explain the cause of the difference in stocks until the ongoing forensic audit by London-based consultancy services firm, Channoil Consulting, is concluded.

We have seen the letter but we are awaiting the forensic audit. The firm has about three weeks to go then we will have a comprehensive position,” Mr Ngumi said in a phone interview.

Technically, there should be no difference between physical and book stock values because the automated systems are meant to transfer data automatically from the meters at the pipeline and depots to the accounting books.”