Kenya was last week grappling with a biting shortage of petroleum products that caused transport disruptions estimated to cost millions of shillings.

The problem could still spread to neighbouring countries.

Nairobi, the capital, consumes at least 60 per cent of Kenya’s total monthly petroleum uptake and was hit hardest by the shortage.

The scarcity has been blamed on intense pricing battles over consignments that were to be shipped in mid March, but could not land at the port for lack of storage space.

The government said while the country had enough petroleum stocks, delayed evacuation of products from the Kenya Pipeline Company storage tanks was the main cause of the shortage that extended into the weekend despite President Kibaki’s order for stakeholders to address the problem.

On Thursday, Energy Minister Kiraitu Murungi gave oil marketers 10 days to clear stocks that the KPC holds in their names to end the crisis, which looked set to hit Uganda and Rwanda.

The crisis has delayed delivery of at least 8 million litres into KPC’s system.

Mr Murungi said KenolKobil had not delivered 7 million litres of petrol it was supposed to bring in under the OTS system for the month of March.

The oil industry in East Africa’s biggest economy suffered a similar crisis four years ago.

Under the current supply system, all oil imported into the country — including fuel headed for neighbouring Uganda and Rwanda — must come into the country by one ship, imported by one player and shared by the rest according to market share.

Last week, President Kibaki summoned top Treasury and Energy officials and ordered them to ensure that the shortage is dealt with immediately.

The crisis came as economies in the region were grappling with high pump prices attributed  to surging global crude prices in the wake of unrest in the Middle East and North Africa and increased demand from strong economic growth in countries such as China and India.

The price of diesel, on which Kenya’s economy is deeply dependent for transportation, power generation and agriculture, rose 14 per cent, while the price of kerosene, the domestic fuel most widely used by a majority of the country’s 38 million people, rose 8 per cent.

Rising global fuel prices have led to over 20 per cent increases in fuel prices in Tanzania and Uganda, while in Rwanda fuel prices have increased by about 15 per cent this year.

Unlike its East African Community counterparts, Rwanda has enjoyed relatively low and stable fuel prices, mainly because oil is treated as a sensitive product and fuel prices are regulated.

The country is considering lowering taxes on oil imports as it seeks to minimise the impact of rising global fuel prices on the economy.

Globally, countries have been facing soaring food and fuel prices as well as unemployment, stoking social unrest.