Kenya Says Oil-Company Profit Margins ‘Unacceptable’

Sept. 17 (Bloomberg) -- Kenyan fuel-marketing companies’ profit margins are 50 percent above “acceptable” limits, said Energy Ministry Permanent Secretary Patrick Nyoike.

Margins should be 6 shillings ($0.07) per liter instead of the 12 shillings charged at present, Nyoike told reporters today in Nairobi, the capital, after a meeting with oil companies. The current level is a level that is that companies currently make is “totally unacceptable,” he said.

“There is a lot of profiteering,” Nyoike said. “I have appealed to the oil industry to reconsider their position.”

Oil companies that operate in Kenya, East Africa’s biggest economy, include Total Kenya Ltd., a unit of Total SA, KenolKobil Ltd., and Kenya Shell Ltd., a division of Royal Dutch Shell Plc.

The companies pay an average of 83 shillings per liter to buy gasoline from fuel depots, according to a ministry statement handed to reporters today. Gasoline currently retails for 96 shillings to 100 shillings in Nairobi.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.