The Competition Authority of Kenya (CAK) has warned oil marketing companies (OMCs) that they face a fine of up to Sh10 million of five-year jail term for hoarding fuel products.
In a statement issued on April 10, CAK director general David Kemei said the authority has noted ongoing public debate about the availability of petrol, diesel, kerosene and Jet A-1 across the country.
The authority also pointed to reports that some OMCs may be withholding supply or refusing to sell to non-franchised petroleum retailers in anticipation of price increases.
Fuel shortages have disrupted businesses and households, raising concerns about unfair market practices.
The authority stressed that fuel is “an essential commodity that underpins economic activity and public welfare,” and warned that any deliberate attempt to create artificial scarcity or manipulate prices is prohibited under the Competition Act.
“Any deliberate attempt by suppliers, distributors or retailers of fuel products to withhold supply from the market to create artificial scarcity, manipulate prices or gain unfair commercial advantage is a prohibited practice under the Act,” the statement read.
The Authority highlighted several sections of the law that companies risk breaching. Section 21(1) prohibits agreements or decisions by undertakings or associations that prevent, distort or lessen competition.
Section 21(3)(f) bars undertakings from imposing dissimilar conditions on equivalent transactions, thereby disadvantaging certain trading parties.
Section 57 prohibits unconscionable conduct in business transactions involving the supply of goods and services to business consumers.
“Take notice that such conduct may attract a financial penalty of up to 10% of an undertaking(s) preceding year’s gross annual turnover in Kenya,” the Authority cautioned. “Additionally, the undertaking found to have breached the Act are liable, upon conviction, to imprisonment for a term not exceeding five (5) years or to a fine not exceeding KES 10 Million.”
The Authority also acknowledged statements by government officials and agencies suggesting that some OMCs may be hoarding fuel. It stressed that such practices not only distort competition but also harm consumers who depend on fuel for daily activities.
CAK further noted its cooperation framework with the Energy and Petroleum Regulatory Authority (EPRA), which has oversight powers in the energy sector.
“Under its existing cooperation framework with the EPRA, the authority will continue to monitor the situation across the country and engage the sector regulator as necessary,” the statement said.
The crackdown comes at a time when motorists and businesses are grappling with fuel shortages, sparking fears of economic disruption.
By invoking the law and warning of punitive measures, the CAK aims to deter OMCs from engaging in practices that could destabilise the market and undermine consumer welfare.
