Business

Kenyans troop to Uganda for fuel supplies

Cost disparities at border points force residents to use boda boda to smuggle petroleum products

Musa Radoli

The petroleum products pricing crisis in Kenya has opened floodgates for boda boda motorbike operators and motorists living at the Kenya – Uganda border towns of Busia and Malaba to purchase the products from Uganda where they are cheaper compared to Kenya.

It has also triggered smuggling of the commodity from Uganda to Kenya with motorbike boda boda operators making a killing in the emerging phenomenon, as some abandon their passenger transportation ventures to smuggle fuel.

Ironically for years, petroleum products’ smuggling has been thriving from Kenya to Uganda with many Kenyan traders setting up illicit petrol stations in Sofia and Marachi estates in Busia town, straddling the common border, but fizzled out in the late 1990s.

The current trend erupted immediately after the government affected the highly rejected 16 per Value Added Tax (VAT) on petroleum products.

However, the pump prices in Uganda remain unchanged because the country has not imposed VAT on these products which are ironically imported from Kenya.

Petrol stations in both towns have run dry as distributors downed their tools last week in protest.

Petrol is being sold at Sh110 in Uganda while diesel goes for Sh102 per litre compared to Busia where the same is going for Sh131 and Sh118 respectively, or even higher, as the products’ scarcity continues to bite.

The biggest beneficiaries of the crippling situation are the more than 20,000 boda boda motorbike operators who use the myriad panya routes along the Kenya – Uganda border not just to fuel their bikes but also armed with several 20-litre jerry cans to smuggle both diesel and petrol to sell at a slightly higher price to Kenyan consumers.

Customs checks

According to the Busia Taxi Operators Association chairman Titus Mulongo: “Those of us operating vehicles are facing challenges to fuel our vehicles in Uganda because we have to go through the customs checks both in Kenya and Uganda and its time consuming, but at the moment we have no alternative.”

Kenyans conversant with the border are using murrum roads in Sofia and Marachi estates to cross into Uganda to fuel their vehicles and those with extra cash buy extra stock to sell back home.

However, those in Malaba town are not so lucky since the border between the two countries is River Malaba with the customs and immigration offices of either side smack on the river, which meanders from the north to the south.

“Since the VAT on fuel came into effect, there is no petrol or diesel here in Malaba, yet every few minutes we watch these products being transported across the border to Uganda. We have to hassle through customs (Kenya Revenue Authority and Uganda Revenue Authorities) to fuel at petrol stations in Uganda,” said Mwalimu John Opakasi the Malaba Transporters Association (MTA) chairman.

Opakasi said that unlike Busia, River Malaba was a major impediment to motorbike boda boda operators who cannot ride through its steep slopes to the river’s bottom to smuggle petroleum products into Kenya.

He said, however, enterprising traders were simply using footmen armed with jerry cans to cross the river to and from Uganda to avoid any inconveniences at the customs offices. The footmen are then hiding the smuggled product in shops ready to sell to those who cannot cross into Uganda.

Gate pass fees

Inquiries by People Daily established that matatu operators in Malaba and Busia were not crossing the border to fuel their vehicles because Kenyan vehicles have to pay for gate pass fees which will make it unprofitable for them to venture into Uganda.

Benson Bulumaa matatu operator on the Busia – Kisumu route said: “To avoid such inconveniences we simply arm ourselves with jerry cans jump on boda boda for a ride to the petrol stations in Uganda to buy petrol or diesel cruising through the panya routes either in Sofia or Marachi estates.”

“Ugandan police officers are aware that fuel prices in Kenya have gone up so they are not allowing PSVs to access Uganda,” said another matatu driver, Moffat Ouma.

Tankers transporting petroleum products from Kenya Pipeline Company (KPC) depots in Kisumu and Eldoret pass through Malaba and Busia border towns for  clearance before proceeding to their various destinations in Uganda, Rwanda, Burundi and the DRC.

According to one of the truck drivers, it is difficult to divert the petroleum products they were transporting across the border because all export petroleum products are distinctly marked.

“It is very tempting to sell the fuel locally considering the very hungry market in Kenya, but these tankers are full-proof sealed with products distinctly marked or coloured for export and not local consumption, therefore any attempts to sell the fuel locally would amount to trouble.”

With the hike in diesel prices, posho mill operators have also been forced to double milling charges from Sh10 per kilogramme to Sh20 whereas in Uganda the same is being milled at an equivalent of Sh5.

This has forced Kenyans to troop into Uganda to either purchase milled flour, or to take their grain for milling in Uganda, at a cheaper price.

Busia Chamber of Commerce secretary Jared Barasa said the hardest hit were millers operating diesel posho mills in the interior further away from the border.

“Those close to the border simply cross to Uganda to get their diesel, but they have nevertheless increased their charges. Our people are now flocking to Uganda for fuel when just last month it was the Ugandans coming to Kenya for the same,” said Barasa.

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