By Peter John

The Competition Authority of Kenya (CAK) has issued a stern warning to oil marketing companies over alleged fuel hoarding, cautioning that firms found culpable risk severe penalties, including hefty fines and possible imprisonment.

In a statement released on Friday, the Authority said it is aware of growing public concern regarding the availability of petroleum products—petrol, diesel, kerosene and Jet A-1—amid reports of supply disruptions across the country.

The regulator pointed to indications that some companies may be withholding supplies, particularly from non-franchised retailers, in anticipation of a price increase.

CAK Director-General David Kemei warned that such conduct is illegal and undermines both economic stability and consumer welfare.

“Fuel is an essential commodity that underpins economic activity and public welfare. Any deliberate attempt by suppliers, distributors, or retailers to withhold supply from the market to create artificial scarcity, manipulate prices, or gain unfair commercial advantage is a prohibited practice under the Act,” Kemei said.

The Authority noted that companies found in violation of the Competition Act could face financial penalties of up to 10 percent of their preceding year’s gross annual turnover in Kenya.

Additionally, offenders risk criminal sanctions, including fines of up to KSh10 million or imprisonment for up to five years.

CAK further cited key provisions of the law that prohibit agreements or decisions that distort competition, as well as practices that impose discriminatory conditions on trading partners.

It also highlighted provisions barring conduct that restricts competition and outlawing unconscionable business practices in the supply of goods and services.

The regulator affirmed its mandate to investigate anti-competitive conduct and said it will continue to monitor the situation in collaboration with the Energy and Petroleum Regulatory Authority (EPRA), the sector regulator.

The warning comes amid increased scrutiny of oil marketing companies by government agencies.

Earlier this week, EPRA cautioned firms against hoarding petroleum products and inflating wholesale prices following reports of an artificial fuel shortage nationwide.

Preliminary investigations by EPRA indicate that some companies may be deliberately restricting supplies to independent retailers, commonly known as “independents,” in anticipation of a price hike.

The developments have coincided with mounting complaints from motorists over long queues at fuel stations, raising fears of supply shortages.

Concerns have also been heightened by global tensions in the Middle East involving Iran, the United States, and Israel, which have impacted oil markets.

However, Treasury Cabinet Secretary John Mbadi sought to allay fears, telling lawmakers that the country currently has sufficient fuel reserves to cushion against short-term disruptions.

According to Mbadi, Kenya holds stocks equivalent to 16 days for petrol, 19 days for diesel, and 49 days for jet fuel and kerosene.

He added that under the government-to-government fuel importation arrangement, suppliers are sourcing petroleum products from alternative regions such as Europe and India to ensure continuity of supply.

Even so, regulators have maintained that any attempt to manipulate the market through hoarding or restrictive practices will be met with firm enforcement action.