it's the rear sprocket. they are not very precise and almost all of these kits experience the "loose, tight , loose" chain syndrome as the bike rolls. the sprocket will not be perfectly centered on the rear wheel in most cases. I have the same problem and i've struggled with it. i have it centered on the rear wheel as best as possible, but i still have the same problem as you are having. I've just learned to live with it, but i have a spring loaded chain tensioner coming that may solve the problem. The chain tensioner that i got, is not for motorized bikes, but it's much better looking than the stock idler wheel that the kits come with. the difference is that the one i got has spring tension, so it will move up & down as the chain gets loose, and then tight. it will keep the chain at a constant tightness as it rolls. I have not gotten it yet, so i'm not sure exactly how well it will work yet. it was cheap, and it's made from aluminum with a high speed bearing in the tensioner wheel..plus, it's adjustable.
There are also sprocket adapters that allow you to get the rear sprocket centered perfectly on the back wheel, but they are expensive.