Puzzle of Sh3.4b ‘missing’ jet fuel at Kenya Pipeline facility

Kenya Airways plane at JKIA. [David Gichuru/Standard]

Kenya Pipeline Company (KPC) is on the spot again after oil marketers raised the alarm over the disappearance of jet fuel valued at more than Sh3 billion that may have sparked a shortage last week.

Operations at the Jomo Kenyatta International Airport (JKIA) almost ground to a halt last week following a biting shortage of jet fuel due to what was blamed on oil marketers ordering less stocks than the demand.

But the marketers now claim the State-owned firm, which manages the country’s pipeline infrastructure and fuel storage, cannot account for 51.2 million litres of fuel.

At an average of Sh67 per litre, this would translate to Sh3.4 billion worth of the commodity allegedly lost under unclear circumstances.

The oil marketers in a letter seen by The Standard to KPC dated March 7 raised the alarm after the firm announced that it had only 10,519 cubic metres of jet fuel last week.

The oil firms said according to their books, KPC should have been holding 61,785 cubic metres of stocks.

“The 51,266 cubic metres variance of our DPK/Jet stocks in the KPC system requires an explanation from KPC as we have already imported this stock, and discharged it into KPC system and the same confirmed by your records,” read part of the letter signed by the nine big oil marketers in the country.

“Kindly, but urgently, clarify this to the oil industry as the current Jet A-1 crisis is unclear to us, as we have imported sufficient stock to service the Kenya Aviation requirements,” the letter read.

The allegations against KPC come hot on the heels of another scandal after the parastatal reported last year that 11.6 million litres of fuel valued at Sh1.2 billion had been lost under unclear circumstances through leakages and vandalism on its network over a two-year period.

While the jet fuel shortage was only announced last week, it emerged KPC may have been aware of the impending situation as far back as a week earlier.

The oil marketers said the firm had on February 28 tried to suppress daily limits by 30 per cent, but this was not enough to stem the shortage that peaked on March 4.

Other locations

“We held a meeting on Thursday February 28 and agreed on various action aimed at suppressing Jet A-1 daily demand at JKIA by 30 per cent,” said KPC in a letter signed for Acting Managing Director Hudson Andambi to Kenya Civil Aviation Authority Director-General Gilbert Kibe.

KPC expected the stocks to run out by Thursday last week and told Mr Kibe to advise airlines to tanker fuel from other locations and reduce uptake from JKIA and Mombasa airports.

The pipeline yesterday declined to comment, saying there was an ongoing audit on fuel stocks that would reconcile the numbers.

“What we gave was the stock that we had at that specific time,” said an official, who declined to be named because they are not authorised to speak to the media.