The Kenya Pipeline Company (KPC) has begun collecting views and comments from stakeholders on its proposed tariffs review which will affect import handling, primary storage and the truck loading.
Energy and Petroleum Regulation Authority (EPRA) Director General Daniel Kiptoo said that Kenya Pipeline Company manages several common user petroleum logistic facilities that are crucial to the storage, transportation and distribution of petroleum products across Kenya, these include the pipeline network, the storage depots, the jetties and the loading terminals.
“KPC charges the tariffs for the usage of its infrastructure, and these tariffs are reviewed and approved every three years through a public participatory process facilitated by EPRA,” explained Kiptoo.
Speaking in Nairobi on Wednesday during a consultative workshop on the review of KPC tariffs, Kiptoo said that under the Energy Act of Kenya 2019, EPRA is mandated to ensure fair and reasonable tariffs for KPC services.
“Further section 11B of the act empowers the authority to set, review and approve tariffs and contracts related to common user petroleum facilities and products,” explained Kiptoo.
He noted that all refined petroleum products imported into the country, premium motor spirits, automotive gas oil; and dual-purpose kerosene come through Kipevu oil storage facility (KOSF), Kenya Petroleum Refinery Limited (KPRL) as well as VTDI Kenya Terminal based in Mombasa.
“In addition, KPRL has petroleum products, truck loading and LPG import handling facilities,” said Kiptoo.
He highlighted that KPC uses the rate of return approach in its determination of tariff. This method involves calculating the allowed rate of return of KPC’s regulated assets, considering factors such as depreciation, operating costs and throughput projections.
“For the controlled period 2024-2025 to 2026-2027, KPC has proposed tariff increases for its import handling and primary storage services. These increases will be 24% in 2024-2025, followed by 8% in 2025-2026 and 1% in 2026-2027,” he said.
Kenya Pipeline Company Chief planning officer Ms. Elizabeth Akinyi noted that the core mandate of KPC is to handle petroleum products that are imported for local consumption.
“We have storage facilities in Mombasa that include Kenya Petroleum Refinery Limited and Kipevu Oil Storage facility,” she said.
She added that there is also a hydrant system at Jomo Kenyatta and Moi International Airport that is used to fuel products directly from the depot to the aircraft.
“We recently constructed an Oil Jetty in Kisumu in efforts to serve and open up the region,” said Ms.Akinyi.
By Patience Mabonga and Rebecca Kibegwa
