Kenya Loses Regional Fuel Traffic to Tanzania Over Contamination

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Rwanda and Burundi stopped importing their fuel needs through the Kenyan port of Mombasa because of the contamination of some cargoes and have opted to route shipments through Tanzania instead, according to the Kenya Transporters Association.

The East African nations switched routes earlier this year after finding that imports through Tanzania’s main port in Dar es Salaam were untainted, Chief Executive Officer Alfayo Otuke said in an interview. Tanzania also allows heavier loads, he said.

“Kenya’s position as the preferred petroleum importation route for landlocked East African nations is slipping out of our hands,” Otuke said Oct. 19. “It’s because importers feel our fuel is contaminated. We have unscrupulous traders. We have cases where some load transporters siphon fuel, add other products and when it gets to the destination countries, it is found to be adulterated.”

Mombasa, the biggest harbor on the East African seaboard after Durban in South Africa, is facing increased competition from neighboring Tanzania where the government is expanding the port at Dar es Salaam and plans to spend $10 billion building a new one at Bagamoyo, 52 kilometers (32 miles) north. The Kenyan port expects the volume of cargo to almost double to 2 million twenty-foot equivalent units by 2020, according to the Kenya Ports Authority.

Growing Competition

Rwanda’s Trade and Industry Ministry Francois Kanimba said he wasn’t aware of any changes, while the director of energy at the Utilities Regulatory Agency, Alfred Byigero, said the government doesn’t dictate where fuel dealers buy their products. Burundi officials were not available for comment.

Mombasa is a gateway for imports to Rwanda, Burundi, Uganda, South Sudan, Eastern Congo and northern Tanzania and also an exit point, mainly for agricultural commodities such as tea and coffee.

To preserve some of its Rwandan and Burundi business, East Africa’s biggest economy plans to open a new and shorter road through its southern frontier town of Taveta, and through Tanzania, rather than the roundabout route through Uganda, according to Otuke.

While Kenya’s $63.4 billion gross domestic product has been dominant in the region for decades, Tanzania, which is geographically bigger and holds vast quantities of gold and gas, is vying for more economic and political sway.

In addition to the new port, the country is planning a $7.6-billion railway connecting Dar es Salaam to Burundi, Rwanda, Congo and Uganda. The link could rival Kenya’s own new line targeting the same countries. Construction of the first phase of that line, which will connect the port to the capital Nairobi, will be complete in about eight months.

Losing Business

The KTA is not overly concerned about the potential loss of business to a new Kenyan railway, Otuke said.

“The railway line has a fixed length, there’s the last mile that a transporter is always required,” Otuke said. Members will move half of their trucks to Nairobi and help move cargo to the owners throughout the region.

KTA members own about 40,000 trucks and have about 10 of them on every kilometer of the passage between Mombasa and the border with Uganda at any given time. Transporters expect to benefit from a new corridor Kenya is opening up between a planned port in Lamu, north of Mombasa, to South Sudan and Ethiopia in the north, Otuke said.

“We see a huge new market coming, which is not serviced by the standard-gauge railway,” Otuke said.

 

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