TotalEnergies in Sh14bn loans on high fuel costs

The oil marketer noted that its net finance costs –after taking into account interest income on assets such as bank deposits— rose to Sh353 million from Sh67 million and was attributable to the high working capital requirements.

The rise in fuel prices as well as the weakening of the Kenya shilling has significantly raised the cash oil marketers need to buy the commodities, prompting some of the large players to bridge the deficit through borrowings.

The landed cost of petrol in the January 2022 price-setting cycle stood at $601.97 per cubic metre, according to the Energy and Petroleum Regulatory Authority.

The cost rose in subsequent months and closed at $704.21 per cubic metre for the December 2022 monthly price review, representing an increase of $102.24 per cubic metre of the commodity.

The landed cost of a similar unit for diesel on the other hand jumped from $565.92 in January 2022 to $920.44 in December 2022, amounting to a jump of $354.52.

The increase in the cost of purchasing the commodities was exacerbated by the weakening of the Kenya shilling and shortage of US dollars –the currency in which most international transactions are settled.

TotalEnergies also reported a sharp jump in receivables from customers.

The company said its trade and other receivables increased by Sh12.4 billion in the year ended December compared to Sh1.4 billion the year before.

The oil marketer did not give details of the amounts claimed from trade partners. Its rival Vivo Energy Kenya, meanwhile, said the government owed it $167 million (Sh22.6 billion) in the same period, representing unpaid fuel subsidy.

TotalEnergies declared a dividend of Sh1.31 per share which will be paid on July 31 to shareholders on record as of June 15. The company had paid a similar dividend for the previous year.