I get electricity for free; can get fuel for free as well?
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
01 March 2026
When the government announced its intention to sell shares in the Kenya
Pipeline Company (KPC) in July last year, I made a passing comment that
I would buy enough shares so that the dividends paid could meet my
annual fuel expenses. This was prompted by the fact that the dividends I
get from my Kenya Power and KenGen shares are enough to pay my
electricity bills for a year. Why not do the same with KPC?
Following that comment, Michael Munyao asked me this: “If I spend
Sh5,000 on fuel every month, how many shares of KPC should I buy?” To
get the answer we start by finding out the dividends that the company is
likely to pay. From the Information Memorandum that was published in
support of the Initial Public (share) Offer, IPO, we find that KPC paid
dividends as follows:
Sh149 per share in 2021; Sh440 in 2022; zero in 2023; Sh385 in 2024 and
Sh325 in 2025. But, before getting excited, it is important to note that
these are not the same shares that the government is selling! Before the
sale, the company subdivided its shares by 1,000. That is, each of the
old shares was split into 1,000 tiny little pieces.
The reason for splitting was to make them affordable to retail
investors. Without the split, each would have been offered at Sh9,000
instead of the Sh9 that was announced. Therefore, the above dividends
per share should also be divided by 1,000. I cannot understand why this
wasn’t done in the official document!
Consequently, the correct dividends are: Sh0.149 per share in 2021;
Sh0.440 in 2022; zero in 2023; Sh0.385 in 2024 and Sh0.325 in 2025.
These numbers are very scattered, going up and down so wildly that it is
difficult to get a meaningful trend. The mean dividend over the last
five years is about Sh0.25.
If we assume that this average will be maintained, how many shares does
Michael Munyao need in order to earn Sh5,000 (one month of fuel)? The
answer is Sh5,000 divided by Sh0.25, that is, 20,000 shares. For one
year’s worth of fuel, Michael needs 240,000 shares.
Now 240,000 shares at the IPO price of Sh9 each comes to Sh2.16 million.
That’s more expensive than most cars on Kenyan roads! Now that the IPO
has closed, let’s wait and see how the price will behave when open
market trading begins later this month. May be it will drop.
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