National Assembly Committee on Energy revealed that the Kenya Pipeline Company (KPC) is grappling with significant losses because of fuel theft, estimating an annual loss of Sh600 million along its network from the Mombasa port.

The impact of this illicit activity on the company's profitability is a matter of concern for both regulators and industry stakeholders.

KPC is reported to be losing 0.04 per cent of the fuel throughput annually, equivalent to 3.2 million litres, according to disclosures by the National Assembly Committee on Energy.

Although this rate is below the 0.25 per cent threshold set by the Energy and Petroleum Regulatory Authority (EPRA), it underscores the pressing issue of fuel siphoning and leakages along the pipeline.

MPs are urging the installation of a leak detection and surveillance system to curb the rising cases of fuel theft.

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Despite the challenges, KPC managed to post a net profit of Sh4.16 billion in the fiscal year ending June 2023, with throughput volumes increasing by six per cent to 8.67 billion litres compared to the previous year's 8.18 billion litres.

The committee expressed concern about fuel theft from Kenya Pipeline Company, stating that they were losing 0.04 per cent of throughput products, exceeding the 0.25 per cent threshold set by EPRA. 

"Kenya Pipeline Company is losing throughput products of 0.04 per cent against a threshold of 0.25 per cent set by the Energy and Petroleum Regulatory Authority (EPRA) through theft," highlighted the committee. 

"Considering that Kenya Pipeline transports about eight billion litres annually, the 0.04 per cent translates to around 3.2 million litres lost and approximately Sh600 million in revenue lost."

The repercussions of these fuel losses are felt by consumers, as KPC, in an attempt to recover losses, collects Sh0.16 for every litre of diesel and petrol and Sh0.15 for kerosene sold. This is evident in the monthly fuel pricing schedule, effective until February 14, further emphasizing the economic impact on end-users.

To cover the pipeline losses, KPC collects Sh0.16 for every litre of diesel and petrol and Sh0.15 for kerosene sold, as indicated in the monthly fuel pricing schedule ending on February 14.

Oil marketers, reliant on KPC's pipeline for transporting their products, have expressed concerns about these fuel losses, urging the Energy Ministry and KPC management to take decisive action.

The alarming figures brought to light by the National Assembly Committee highlight the urgency for a comprehensive strategy to combat fuel theft, safeguarding KPC's profitability and ensuring a stable fuel supply for the nation.