Kisumu stakeholders meeting opposed to KPC tariffs hike plan
Stakeholders in the energy sector have raised concern that Kenya Pipeline Company’s (KPC) bid to review transportation and storage tariffs for the period 2021/22 to 2024/25 will increase cost of living.
The company seeks approval from Energy and Petroleum Regulatory Authority (EPRA) to increase pipeline transportation and secondary storage tariffs for the next three years.
During a heated stakeholder’s consultation workshop in Kisumu, petroleum dealers and consumers said the proposal to review the storage and transit tariffs will see an unprecedented rise in consumer spending given that the region is already paying high retail pump prices.
“What do you have in store that will guarantee us sustainability of the said hiked prices as the high tariffs continue to impact on millions of consumers and the line business community,’’ posed Ismael Atudo from Siaya County.
KPC submitted an amended tariff application in July to amend storage charges paid by Oil Marketing Companies.
The application for a tariff hike seeks to cushion KPC from capital expenditure deployed in the provision for capacity enhancement of the Eastern Mombasa-Nairobi pipeline section.
The upward review of tariffs by EPRA is expected to come as a reprieve for KPC which has seen its revenues slide through recent downward reviews in both 2019 and 2021.
In its 2020 annual report, KPC attributed Sh5.4 billion revenue reduction to the downward revision of pipeline tariffs by EPRA, which went down by between 19 and three per cent for local sales and by between 48 and 33 per cent for export sales.
Yesterday, EPRA Director General Daniel Kiptoo was at pains to explain why the KPC’s move was justified, saying they were duty bound to balance the interests of the investors and consumers.
“The key issue here is to balance the competing interests which are sometimes overwhelming,’’ he explained and implored on the stakeholders to be patient as the situation was bound to change.
He said the tariffs will be periodically reviewed depending on the local and global market dynamics so as to cushion the investors and consumers from the dwindling market fortunes.
