The Kenya Pipeline Company is fighting to regain the market share it lost in East Africa last year following rampant fuel adulteration.
The company is now offering a 30 per cent discount on petroleum products in transit loaded for the Great Lake’s region at its Kisumu and Eldoret depots in western Kenya.
The discount targets Rwanda and Burundi — which last year opted to transport oil products by road from Tanzania’s Dar es Salaam port.
Energy Cabinet Secretary Charles Keter has approved a new tariff for fuel in transit loaded at the two depots at $41.55 per 1,000 litres down, from $59.32.
The new rates take effect next month and are expected to reduce the cost of doing business for oil marketing firms while protecting roads from the heavy toll caused by petroleum tankers.
Mr Keter said the new tariff will bolster regional business by strengthening Kenya’s ties with Uganda, Rwanda, Burundi, South Sudan and the eastern Democratic Republic of Congo.
“The move by KPC aims to pass on the benefits of its capacity enhancement in the western region to its customers as well as support regional trade by lowering the cost of doing business,” he said.
Kenya Pipeline Company said tariff reduction will help the state corporation recapture its lost regional petroleum market share, especially in Rwanda and Burundi.
“We want to get the market share back and through proactive measures extend our operation to new frontiers in the region,” said KPC managing director Joe Sang.
KPC is investing to increase capacity to serve local and export markets. The firm is building $490 million 20 inch pipeline to pump 1,800 cubic metres of fuel per hour from Mombasa to Nairobi to replace the 14-inch facility commissioned in 1978 with a capacity of 830 cubic metres.
India’s Prashanth Project Ltd is building $52 million four tanks in Nairobi with capacity of 133.52 million litres to receive higher volumes of fuel for domestic use and export after new pipeline from Mombasa is completed.