Marketing for TotalEnergies In the fiscal year that concluded in December, Kenya took out Sh14.5 billion in short-term loans to cover its drastically increased working capital needs as a result of increasing fuel prices and customer debt. As a result of the additional loans, the company’s finance costs more than quadrupled to Sh919.8 million, which helped to cause a 10.7 percent decline in net profit to Sh2.4 billion. The amount of money that oil marketers need to buy commodities has increased significantly as a result of the rise in gasoline prices and the depreciation of the Kenyan shilling. Some of the main companies have had to go on debt to make up the difference.

“The rise in global oil prices increased fuel prices in the country as well as the company’s working capital requirements,” TotalEnergies said in a statement.

Fuel had a landing cost of $601.97 per cubic metre in the January 2022 price-setting cycle, according to the Energy and Petroleum Regulatory Authority.

For the December 2022 monthly pricing review, the price increased for several months straight, rising by $102.24 to $704.21 per cubic metre.

On the other hand, the landed price of a comparable fuel unit climbed by $354.52, from $565.92 in January 2022 to $920.44 in December 2022.

The weakening of the Kenyan shilling and a dearth of US dollars, the currency used for the majority of international transactions, made the rise in commodities prices worse.

The oil marketer withheld the amount it claimed from trading partners. Vivo Energy Kenya asserted that during the same time period, the government owes it $167 million (Sh22.6 billion) in unpaid fuel subsidies.