Major oil dealers caught selling adulterated fuel

Some dealers contracted by major marketers such as the State-owned National Oil and Shell have been found to have been selling contaminated motor fuel.

The Energy Regulatory Commission (ERC) revealed yesterday that that two stations operating under the Shell brand and one operating as National Oil were fined and closed for sometimes between May and last month.

The Shell service station in Kiambu town was caught offering for sale diesel contaminated with Kerosine and was charged Sh700,000 in fines, penalties and duties to the Kenya Revenue Authority. The station was closed for 22 days but has since been reopened.

The Shell service station, Sonning, located in Adams Arcade, was found offering for sale motor gasoline contaminated with Kerosene. This station was closed for 10 days but reopened after paying of fines, penalties and taxes amounting to Sh500,000 to the Kenya Revenue Authority.

ERC said the NOCK service station in Kiambu town was guilty of selling motor gasoline contaminated with Kerosene. The station was closed for a total of 37 days and later reopened after it paid fines, penalties and duties amounting to Sh500,000 to KRA.

Officials from both NOCK and Shell said the matter should not raise an alarm since it has since been resolved. "This issue has already been resolved. ERC has said we are okay," said a Vivo official. National Oil said any dealer found to be non-compliant is heavily reprimanded, sometimes to the point of the licence being cancelled.

"The penalties are so bad, to the point that some dealers have to leave their bank guarantees," said a Nock official. The official added that consumers should not be scared because the issues have been resolved and scrutiny of dealers heightened.

The ERC runs a programme of continuous monitoring of the quality of petroleum motor fuels that are sold throughout the country. Section 95 of the Energy Act prohibits the storage, transportation and sale within Kenya of petroleum products that do not conform to set standards or selling adulterated petroleum products.

The section also forbid distributors from selling within Kenya petroleum products intended for export to neighbouring countries.

Also prohibited is the sale within Kenya of petroleum products intended for export. In total, 14 stations out of the 17 that were inspected by the ERC were found to be non-compliant in the sense of selling either adulterated and or motor fuel intended for export. Five of the 14 stations are still closed as at August 13 because they have not met the ERC conditions.

Most of the non-compliant incidents were reported in Western Kenya in areas such as Kakamega and Bungoma and in Nairobi, Kiambu, Kajiado, Mombasa and Nyandarua.

In Nairobi, the Atam service station on Embakasi Outering Road was heavily fined to the tune of Sh1.5 million for selling both motor gasoline and diesel contaminated with Kerosine.

It was closed for seven days but was re-opened after paying the fines. The Glorious filling station in Kasarani (Mwiki) was selling diesel contaminated with Kerosine and fined Sh100,000 after being closed for 36 days.

Last year, ERC withdrew licenses of 27 fuel stations across the country for selling contaminated fuel and petroleum products meant for export. The stations which ERC did not, however, name were to pay heavy penalties before their licences are reinstated or face a permanent ban.

A monitoring exercise carried between July 2012 and December 2012 by ERC together with Kenya Revenue Authority, Kenya Bureau of Standards and other government agencies involving 841 retail outlets found 97 per cent were compliant while 27 stations were non-compliant.

Operators of the defaulting outlets had their licences withdrawn and were further required to pay penalties and taxes prescribed under the applicable tax laws before resumption of business.