ERC - Regulator or Speculator?

KenolKobil used to provide its 'understanding' or forecast on where the price of fuel is headed... Since the trajectory of prices was on the ascent i.e. going up on a monthly basis... Do remember that fuel is price controlled in Kenya...

Read Kenya's Oil Industry - The Unholy Trio

There were 3 main reasons:
1 - Oil prices were rising in the International Market
2 - The Kenya Shilling was falling like a rock vs US$ (in which currency oil is priced)
3 - The inefficiencies of government controlled entities like Kenya Pipeline Company & Kenya Petroleum Refineries.

In August 2011, the CBK governor bitched about KenolKobil's forecasts saying it was fueling inflation. KK has about 25% market share of the petroleum industry. How does he attribute galloping inflation to a single OMC?

...as Central Bank of Kenya (CBK) Governor Njuguna Ndung'u warned that the monthly fuel forecast by KenolKobil was putting pressure on the currency market as players rush to secure dollars on the projections.

"People rush to buy dollars when one company says prices will increase by certain margin on the understanding that they will get them cheaply," said Prof Ndung'u.

So ndungu thinks people are idiots? The KES continued dropping to 107 even after KK was 'banned' form forecasting prices... Seems the problem was not KK but the ineptness of the government!

Then the PS (Patrick Nyoike) in the Ministry of Energy who seems to have a bone to pick with KK... chimed in... http://allafrica.com/stories/201108150085.html & I quote:

 Energy permanent secretary Patrick Nyoike on Saturday said that the government had asked KenolKobil to stop its monthly forecasts. He said the forecasts had seen some marketers hoard fuel in anticipation of higher prices.

"We have stopped Kobil from announcing price changes because that's the work of the regulator and not market participants," said Mr Nyoike, adding that the forecasts had spurred speculation in the oil market and led to the persistent fuel shortages. Prices are normally reviewed on the 15th day of every month.

So let's get this straight... nyoike thinks KK's announcement made OTHER OMCs hoard fuel... Are these OMCs idiots? They probably know what's coming down the pipeline too! Remember this is the other 75% of the petroleum market which includes government owned & controlled National Oil Corporation of Kenya (NOCK).

Fast forward to Jan 2012 >>>

So after all the hot air emitted by nyoike in Aug 2011, it turns out he (& the ERC) decided it was his role to 'forecast' fuel prices BEFORE all the calculations were completed! The ERC is a regulatory body not a forecasting/polling/predicting entity.

http://www.businessdailyafrica.com/Corporate+News/Fuel+marketers+accuse+ERC+of+distorting+market+/-/539550/1303302/-/t76lpyz/-/index.html

When the ERC (which sets fuel prices) & PS of MoE makes such claims, it can trigger stock-outs at Fuel Stations who may hold off on buying fuel at the 'higher' prices. Why should they suffer losses by buying pricier fuel when prices will drop in a few days as indicated by the MoE/ERC?

I guess even in the new Kenya, there are First Among Equals... Don't do what I do...

Or the MoE & ERC may have some other nefarious plan up their sleeves to scam the Kenyan public?
Kenya had the Triton/KPC scam which KPC & MoE (nyoike & murungi) washed their hands off...
Kenya had the KPC scam where the pipeline expansion was sub-par & delayed...

Even some bloggers were gagged... ColdTusker BANNED from predicting scams

Cooking Gas & The Pecking Order

This is a Guest Blog. I have been asked not to reveal the name.


Gas or Not?

After a long period without cooking gas, I got a call from one of my informers. I'd spoken to four petrol station workers, so that they would alert me anytime the commodity was finally supplied.

So on the 27th, early afternoon, I got a call from one of my 'watchers' from the Total Hurlingham petrol Station. I was in the CBD when the call came so it only took me all of 11 minutes to get to the petrol station. I met a gentleman with Yuvenaris/Yuvenalis on his name tag and immediatelly unloaded my empty 13kg cylinder, but he shocked me and told me that there was no gas! I asked him a second time and he assured me that cooking gas had not been delivered.

I almost packed my empty cylinder back into the car, but much as my 'lookout' had told me that  cooking gas is very fast moving in these times of scarcity, I was a bit doubtful about how fast the product could have moved.

I then called my lookout up to enquire about the speed the commodity had moved, and after I explained what I was told by Yuvenalis, he told me to persist, cajole and even threaten. It seems that there is some of racket where the petrol station attendants in charge of cooking gas (and other products that are in short supply) usually hold back from selling it, only to sell it to brokers at a marked up price, as my lookouts from all gas stations confessed.

With this in mind, I persisted and told Mr. Yuvenalis that I was aware that cooking gas had been delivered and that I was not going away until I got my cylinder. I dropped one or two big names and the fellow softened up and told me to stop demanding in a loud voice, and that the gentleman in charge, a Mr. Maweu, who was away, would come and he'd ensure I got my gas.

When Maweu Nzioki, as his badge read, finally came, he informed me that 'very few' cylinders could be availed' after the people that had placed their orders picked their product. He went on to explain to me that "'Orders from above' kept his hands tied as "Watu Wakubwa" usually booked through bigger offices, and there was nothing much he could do. I was even more persistent, and so was he. Mr. Nyachae, the current chair of the C.I.C just happened to be parking his vehicle in the lot, and Maweu then went on to point out Nyachae as one of the Watu Wakubwa who had booked their cooking gas. Up until now, I have not been able to establish if Mr. Nyachae had actually booked for his cooking gas.

I was still not convinced, so I persisted, very loudly telling him that there are no provisions for prior booking and that we were all equal under the constitution, etc, there are no 'big or small people'. It did not take long for him to cave in, and finally, I got my 13kg gas cylinder,  though not as happy a camper as I'd have wanted to be.

As a parting shot, before I left, another gentleman drove into the station asking for cooking gas and Mr. Maweu blatantly lied to him as well, that the commodity was unavailable. I walked into the scene and told the gentleman that there indeed was a supply of cooking gas and he should demand it. Maweu, on sensing defeat quickly sold him a cylinder of 13 kg Total cooking gas, lest I stick around and mess his 'business' more.

That is my sad tale.

Still a kanu government...

An article by Makau Mutua Wetang’ula behaving as if he is Bashir’s lawyer got me thinking...


The current government (cabinet) is composed of the same chaps who were kanu shrills back in the bad old days of danny t moi...


*2012 presidential candidates highlighted*


mwai kibaki - president - He was in kanu for eons and was dan's VP for a while. Quit in 1990 to form DP which many say was a front to break up the opposition (well, let's call a spade a spade - the GEMA constituency) vote that matiba commanded. Thank the heavens he can't run for a 3rd term but never say never. See kaguta museveni of Uganda.


raila odinga - prime minister - RAO was a johnny-come-lately to the kanu bandwagon to which he hitched his LDP cart before he realized he has been outsmarted. Just like his father, he may never see the presidency & at best, like his father, remain a weak #2.

kalonzo muyoka - vice president - Well, I have to admit that for a chap who was all but finished in presidential politics in 2007, turned lemons into lemonade. He prophesied a miracle and a miracle he performed by selling out the ideals of Kenya's fragile democracy for VP's seat.

uhuru kenyatta - deputy PM - The current head of kanu but make no mistake, this is not the dreaded kanu of yore. The mantle of the new kanu may have passed to uhuru but the powers-that-be are almost all from the old kanu. uhuru was considered dan moi's 'project' or preferred successor in 2002. As head of the official opposition, in 2007, uhuru did the math & decided to support the incumbent rather than vie for the presidency.

musalia mudavadi - deputy PM - His dad was some sort of kanu hotshot. The son is an affable chap but seems to be hanging on others' coat-tails. He was made VP for a few days by dan moi. He was uhuru's running mate in 2002.

moses wetangula - foreign minister - Nominated by moi as an MP & he has returned that favour by being a politician who gives nothing but the best for the wrong cause. Implicated or accused of various scams (or at best incompetence) including the purchase of land in Japan for Kenya's embassy at an inflated price. Also known to open 'mouth, insert foot' in diplomatic circles.

george saitoti - internal security - He was dan moi's VP for ages, then dropped like a hot potato. Picked up again but not a chap who was taken seriously thereafter. He oversaw Kenya's worst economic crisis. Either he was clueless about goldenberg or complicit. According to many he was both.

mutula kilonzo - something constitution - was dan moi's lawyer for eons. Here is a chap who probably has a file ala J Edgar Hoover on dan moi & family's stolen wealth. All those pieces of land all over the country including bits of Mau Forest (or what is left of it). He might even have been kanu's lawyer. Well, at some point there was no real distinction between danny boy moi & kanu.

wiiliam ruto - dishonorable mention - came into the limelight in 1992 at the head of "youth for kanu 1992" (yk92) which was a means of getting moi & cohorts re-elected & screwing the Kenyan taxpayer. Soon thereafter came the goldeberg scandal. Well, the dirtier you are the better Kenyan idiots, erm, voters, like you. The erstwhile minister for education or agriculture or something of the sort.


john michuki - environment and national resources - was quite the powerful chap in the old kanu for a brief period. 

fred gumo - regional development - as minister for anything development is an oxymoron. He is as neanderthal as they come but this is Kenya where selling land 'allocated' to you by the kanu government back to the kanu government for KES 300,000,000 means you get re-elected.

william ole ntimama - national heritage & culture - is a chameleon. A former kanu man who changed his colors. I am not sure if he can even sit through cabinet meetings at his age.

yusuf haji - defense - is a chap who was moi's lightning rod as a provincial chief of sorts and now oversees Kenya's defense forces and the huge budgets for shady deals. A very pricey ship never delivered. Third-hand warplanes. Some junk helicopters. You name any piece of war debris, Kenya buys it.

dalmas otieno - public service - heads a ministry that does little. I am being extremely generous. He might have been minister for transport under danny moi. Means jackshit when you consider the state of Kenya's road/rail/air infrastructure during the kanu era.


joseph nyaga - cooperative development and marketing - a long time kanu member until 2002. Some ministerial post under moi's kanu government.


sam ongeri - (mis)education - has served every corrupt regime he could.


Who have I missed? Who should I add to this list?

Business Daily... Quality? Editorial Failure?

From the Business Daily comes this gem...

http://www.businessdailyafrica.com/Opinion+++Analysis/Why+Kenya+needs+a+high+interest+rates+regime/-/539548/1281500/-/6nn5ne/-/index.html

In the United States for instance it is virtually impossible to buy anything in cash even if you have the money. All retailers insist on credit sales preferring to know your credit rating as opposed to accepting cash.

What a load of BULLSHIT - and not the type you can use to improve your crop yields!

Except for purchases over $10,000 (coz of money laundering laws/regulations) it is highly unlikely a retailer is going to refuse 'cash' for any purchase... Heck, why should they say no to good old hard cash?

I challenge the writer to visit a store - electronic, clothing, department store, etc - in the USA & say... I want to pay in cash... Chances are the cashier will smile & say "of course, sir/madam" and take the cash!!!

Retailers do NOT care about your credit history if you are paying cash... after all why should they bother with your credit history if you are PAYING in cash???

Kibaki & the Demolition Squad

Well, I have to give it to President Kibaki, who took a stand as regards the Syokimau, Eastleigh among other demolitions!

http://www.businessdailyafrica.com/Corporate+News/Kibaki+supports++controversial++house+demolitions/-/539550/1281632/-/hvdy4a/-/index.html

Yes, yes... he took the high road & I am glad he did so... It turns out as Carol Musyoka's article describes... there was something fishy about Syokimau...

http://www.businessdailyafrica.com/Opinion+++Analysis/Had+I+not+smelled+a+rat++I+would+also+have+fallen+victim/-/539548/1280374/-/11sxpsp/-/index.html

As for Eastleigh, it is time some order was brought to bear in the area. I may sound a little un-PC but I am sure there are more than a few al-shabaab sympathizers in Eastleigh. Kenya has an important military installation (the Eastleigh Airbase) around which lots of buildings have not only encroached into the 'safe zone but also high/tall buildings which pose a threat to the aircraft.

So we support President Kibaki in getting rid of corrupt cartels within the Lands Ministry. I would even venture that if he lined some of these corrupt officials up against the wall & had them shot... most Kenyan would cheer!

The Dollarization of Kenya

Let's not kid ourselves... and huff & puff about the sanctity of the Kenya Shilling!

There was a time the Exchange Rate was KES 7/US$ & last month it was KES 105/US$... So in less than 40 years the KES has gone to the dogs. And even they spat it out.

When KQ said it will price local/domestic flights in US$ (converted to KES at the prevailing rate) some folks huffed & puffed and called KQ all sort of names...

I said BULLSHIT to those silly arguments that KQ should charge in KES coz it is a Kenyan firm... It is out to make a profit not be patriotic.

Anyway, so comes along this little tidbit... HFCK to source loans in forex to on-lend in forex! Hah! So where are those folks who complained about KQ?

KES interest rate are 24% & climbing... So it makes sense for some who are willing to take the forex risk to borrow in US$ at much lower rates!

The over-arching theme is that Kenya is dollarizing... Ask your supplier about the following goods or services:

• Cars
• Computers
• Flights (local & international)
• Fuel (yep, its a combination of oil prices prices in US$)
• And so on and on and on...

Just dollarize... Zimbabwe did it & it has one of the lowest inflation rates in Africa...

** I hope the idea of a common EAC Currency is shelved until ALL the trade barriers are removed between EAC countries... Then merge the Fiscal Policies of all the EAC countries... Otherwise, it will fail... See the travails of the Euro!

*** A 'new' currency based on a /basket/combination of currencies would be a better idea but harder to implement. Some of the candidates for the basket would include US$, Yen, Yuan, Rupee, Euro, Sterling Pound, UAE Dhiram, Uganda Shilling & Tanzania Shilling. These are countries Kenya does substantial business with...

A Rant On Public Finances

The original blogpost is linked here.

A RANT ON PUBLIC FINANCES

by Ramah Nyang on Friday, 25 November 2011 at 08:53

A quick update on public finances – there’s a treasure trove of data out there with all sorts of interesting inferences to be made on it. However, it usually takes an specific event to trigger a search for data of a specific sort – like say, why projects are stalling and salaries aren’t being paid.

The Eldoret Correspondent, Matthews Ndanyi, sent over an interesting tidbit on how infrastructure projects worth KES 10 B across some 45 Technical Training Institutes have stalled – because of the funds budgeted for these programs has not been released.

Another 1.6 B is also missing in action – and that includes workers wages for between 3-6 months, depending on the Technical Training Institute in question. The sources for this story are scared to talk to the media. The KE Govt being the vindictive bastard that it is [Remember this? -  http://www.youtube.com/watch?v=wGVD3jqvQ70]

their fear is entirely understandable.

Some digging led me to this article –

[http://www.treasury.go.ke/index.php?option=com_docman&task=cat_view&Itemid=54&gid=70&orderby=dmdate_published]

the first quarter review of the Budget’s implementation. On spending by line Ministries – the report said, quote,

“the Ministries that reported under expenditures includes Roads; Water and Irrigation, Higher Education, Science and Technology; Public Health and Sanitation, amounting to KES 7.5 B, KES 5.5 B, KES 4.4 B and KES 3.3 B respectively.”

So there’s over KES 4 B lying around in the Higher Education Ministry, and if you crunch the numbers a little more, it gets more interesting. It’s off target by 24.89% on recurrent spending, and a massive 60.83% on development expenditure.

The story’s sources gain credence – and a series of phone calls and text messages to the Higher Education PS, Chrispus Kiamba, are not responded to. Classical silent treatment – it’s like dealing with an moody partner, only one you religiously pay, and get shoddy returns from.

The thing is, it’s not just the Higher Education chaps that are working at the speed of racing sloths. Aggregated across all Government Ministries, development expenditure’s off target by 46.5%. That’s about half of Uhuru Kenyatta’s highly lauded “investments” not coming on line, and we’re already halfway into FY ’11-’12.

The Water Ministry, which was to spearhead part of the much publicized irrigation blitz the Finance Minister talked about in June, hasn’t touched 54.2% of its development budget. The other bit of the equation – the Agriculture Ministry – makes short work of that. 62% of its development budget is still untouched.

Inference – we’re not bloody serious about taming inflation beyond 2012. Given these figures, I would not be surprised if in 2012, we’ll still see the Central Bank Governor lamenting how food price shocks are making a mess of their efforts to tame inflation.

Also, one, Uhuru Kenyatta’s paying lip service to the business of cleaning up public finances and making sure our taxes go where they’re needed, to do what he claims they should do.

And someone wants me to take this fellow’s pitch for President seriously? Bollocks.

These books look like some failed Hogwarts experiment. Any private firm worth its salt would have the CEO & CFO fired for presenting numbers of this sort – but KE taxpayers being who they are, we either give the CFO & CEO of Kenya.Inc a free pass, or we bury our heads in the sand and assume nothing bad’s happening.

In a ruling this week, Judge Mohammed Warsame described the Government as follows.

“….the government monster in the name of security ought to be investigated and tamed otherwise it may run amok and cause more suffering to the citizens of this country….”

He was talking about the demolition of buildings in Eastleigh, but his words apply to the state of public finances as much as anything else.

This monster, must be brought to heel – but if you’re going to bet on anything, bet on KE taxpayers joyfully casting their ballot for more terrible financial managers in 2012. 

Price Controls - Failures Abound in the Fuel Sector

The populists in GoK and Parliament decided that Price Controls is the way to go... then did (as usual) a half-assed job...

Well, selective Price Controls do not work. They create problems for the Taxpayer at large. They create Rent-seeking. They create inefficiencies & a taxpayer funded bureacracy.

http://www.businessdailyafrica.com/Corporate+News/New+charge+sets+up+consumers+for+higher+petroleum+prices/-/539550/1278248/-/xbrecm/-/index.html

As you know (see prior blogpost here) Interest Rates have jumped to 24% or higher for many Borrowers including OMCs. What a pity the ERC is playing populist politics...

The energy sector regulator, however, declined to give an indication of the margin by which the next adjustment will increase fuel costs, saying the oil marketers “will not be allowed to pass on the lending cost increases in full.”

So who bears the cost???

So whereas Banks (some whose owners/shareholders are either powerful politicians or very well connected) are not under any sort of Price Control regime... Basically, the populist Mandarins at the ERC are saying... "Let the banks make super-profits"

• 8-10% spreads over CBR
• Spreads of 1-5% for forex

but we want you the (legitimate) risk-taking OMC who invests billions in infrastructure to go BROKE... Of course, the Briefcase Dealers are doing a-OK...

As I have argued in the past, many OMCs will STOP importing fuel for the Wholesale Sector. A consevative OMC will import only that product/s it can quickly move through its own sales channel without giving/extending credit to anyone.

The (competitive) Free Market will be killed off as many smaller retailers rely on credit but at 24% (or higher) they cannot afford to absorb the financing costs associated with storage. The OMCs who import and distribute fuel (KenolKobil, Shell, Total, etc) will stop extending credit to the Retailers. In essence, 'trading' will slow down to a crawl.

Bottomline: Price Controls are bad and selective Price Controls create rent-seeking. I expect to see fuel shortages as the norm in some areas serviced by small/independent Retailers as OMCs will not import more than they can sell through their own channels to cut financing costs. The 'distant' areas with mostly Independents will see a thriving black market in fuels.

East African Community - Union? What Union?

Kenya & the rest of the EAC should stop wasting time (& taxpayer cash) on discussing a Monetary Union. It remains a WASTE of time (& taxpayer cash) in 2011, 2012, 2013 or 2014. IMHO, it will remain a waste long 2014! The only beneficiaries are the (taxpayer funded) academics, (taxpayer funded) government bureaucrats, (taxpayer funded) UN/EAC/World Bank/IMF officials & other so-called 'academics' who get grants or paid junkets to attend conferences on someone else's dime!

There are 5 members in the EAC:
Kenya
Tanzania
Uganda
Rwanda
Burundi

Potential Members:
South Sudan
Sudan
Ethiopia

• Rwanda has done the most in the shortest possible time to integrate or become a true EAC citizen by opening up its borders to other EAC members. A progressive leadership knows Rwanda needs the EAC & is working hard to make it the place to be as a launching point into the EAC.
• Kenya has the largest economy in the EAC & has done well compared to the others but it can (& needs to) do much more. At the minimum, the operations at the port in Mombasa and the border (Malaba, Namanga, etc) need improvement. A lot of it.
• Uganda has done OK and even though it still 'fears' Kenya's economic weight, it has a renewed confidence after the confirmed discovery of 2 billion barrels of oil. The political bickering, corruption and decimation of the Constitution to allow Museveni a third term remains problematic.
• Tanzania is a laggard. It has always been and will continue unless there is a HUGE shift in attitudes. I do not see any progress any time soon even though it can be EAC's powerhouse and surpass Kenya's economic might since it has lots of natural resources e.g. gold, natural gas, iron ore, coal, diamonds and lots more. There are huge rivers, plenty of arable land, a long coastline with many harbours and access to a huge hinterland including Zambia, Rwanda, Burundi, etc
• Burundi is a poorly managed Rwanda. Not very consequential but its inclusion into EAC will benefit the region with an emphasis on stability.

My roadmap is simple...

1. Rwanda & Kenya need to 'open' up their borders/trade completely. There remain a few barriers. A joint Customs Union, with electronic paperwork, can benefit the transport of goods to/from Mombasa-Rwanda even though the physical route goes through an unstable Uganda. Kenya should not let Tanzania steal a march on this important trade route.
2. Uganda needs to build the oil refinery ASAP. Then supply Kenya, Rwanda, DRC & Tanzania.
3. Uganda and Kenya need to fix/upgrade/build the railway between Mombasa & Kampala. Then to extend it to Hoima and Kigali.
4. Burundi needs to follow what Rwanda is doing. Not rocket science. Copy the good. Avoid the bad. Simple.
5. Fast-track South Sudan into the EAC. Kenya, Uganda & SS need to extend the railway north to Juba. Perhaps an integrated oil pipeline as well.
6. South Sudan needs to build a refinery. The geopolitics make it difficult but why export crude oil when the processing can be done in situ to create local jobs & opportunities.
7. Tanzania will plod along at its pace but there will some integration though much slower.
8. Ethiopia is a socialist country. Period. It will plod along but Kenya is the natural supply route for southern Ethiopia. It is a huge market/supplier for EAC's goods & services.
9. Sudan is just trying to upset the apple cart for South Sudan. The real market for Sudanese goods/services is South Sudan. Cordial relations with Ethiopia will help both countries. Not a real contender for the EAC.

Monetary Union? Forget it until the trade barriers are removed.

Political Union? Laughable till 2020. Kenya's constitition is untested. Uganda's constitutional Term Limit was shredded to bit. Tanzania is the only EAC country with 'tested' political stability. Rwanda's first change in the Presidency comes up in 2017. No idea about Burundi. South Sudan remains unstable. Ethiopia is a virtual dictatorship. (Arab/Muslim) Sudan will not allow a non-arab or non-muslim to be president/imam/sheik. 

Fiscal Union? A pipe dream until "Open Trade" is implemented. We saw what happened in Europe where the Monetary Policy is managed by the ECB but Fiscal Policy was left with Greece, Italy & Spain.

Bottomline: No-one is giving up 'power' to someone else in the near future.

Price Controls - Failures

No matter how nice Price Controls sound to the public, the truth is they will eventually fail. There may be a TEMPORARY solution for a pressing need during a severe calamity but Price Controls extract a massive cost to any economy if applied over an extended period of time.

The Government of Kenya (GoK) - in this case most of the populist but greedy/hypocritical legislators aka MPigs -  in its usual moronic manner instituted Price Controls on fuels... Now the idiots who pushed for it are shocked that the Price Controls do not work...

http://www.nation.co.ke/business/news/-/1006/1275928/-/4gssnlz/-/index.html

Price Controls create Rent Seeking opportunities among those who have the power to control the supply/sale of these goods/services.

When an Oil Marketing Company (OMC) cannot earn a decent Rate of Return on its investment, it will minimize or stop its activities.

Some Kenyan banks are paying 25% for KES 50mn (or more) for 3-month deposits. Loans are cost a minimum of 25% p.a. therefore the incentive to 'invest' or 'trade' does not make sense for many OMCs.

My analysis is that many OMCs are bringing in the minimum amounts of fuel required to run their retail outlets to attempt to cover the minimum fixed costs. There is little incentive to take additional risks to import fuel to 'trade' thus Kenya will face a fuel shortage unless steps are taken to increase the margins allowed under the Price Controls.

Kenya has an INEFFECTIVE bureaucracy to monitor fuel adulteration which is how some of the OMCs stay in business.

Free Markets allow for many Sellers & Buyers. The first condition is being decimated under the current Price Control regime. The 'smaller' players who cannot internally finance the fuel imports are being driven out of business.

http://www.capitalfm.co.ke/business/2011/11/independent-fuel-dealers-complain-over-pricing/

Kenya's largest OMC by volume (Total Kenya) reported a loss for 3Q 2011 on its fuel operations. The only other OMC that publishes its results is KenolKobil which has a regional network & extensive Trading Operations within Africa. It would not surprise me if some of the mid-sized & smaller OMCs close up shop in 2012 if the Price Controls (which squeeze the margins) remain in place.

I am certain many of the petrol stations adulterate the fuel:

- Kerosene/AGO's specific gravity is similar to Diesel's thus some stations would mix (tax-free) kerosene into diesel. Good for sellers. Bad for buyers.
- Regular petrol mixed in Super petrol then sold as Super/Premium. Good for sellers. Bad for buyers.

This is a complex topic but the simple message is that Price Controls do not work.