Now government takes KenolKobil head on over ‘fuel shortage’ fears

The government has moved to reassure consumers that there will be no shortage of petroleum and its products in the country.

Reacting to a statement by KenolKobil, Energy permanent secretary Patrick Nyoike, also denied accusations that the ministry’s interference with the fuel storage system is the reason behind rising pump prices in the country.

Instead, Mr Nyoike accused the oil marketer of trying to influence the market by refusing to abide by rules negotiated and agreed by all industry players.

“No one has the capacity to frustrate the market,” the PS said during a press conference at his Nyayo House Building offices on Thursday.

He was reacting to Wednesday’s statement that accused the Energy ministry of interfering with ullage at the Kipevu Oil Storage Facility (KOSF).

“We would like to sensitise consumers that this unfortunate increase (in pump prices), and other pertinent future increases, are as a result of high level interference in industry operations, and manipulation of parastatal service providers by the ministry of Energy,” Mr David Ohana, KenolKobil general manager said in the statement.

This, Mr Ohana said, saw their vessel MT Argosy, forced to discharge its cargo at the Port of Dar es Salaam after unsuccessfully waiting for three months at Kipevu.

But Mr Nyoike denied the allegations saying an oil industry committee allocates ullage at KOSF to shippers based on market share, which is calculated quarterly.

The committee’s membership include, among others, the Kenya Petroleum Refineries Ltd (KPRL), Total Kenya Ltd, Hass Petroleum, Kenya Pipeline Company, Gulf, Kenya Shell and Libya Oil.
“The ministry has nothing to do with the increase in pump prices as purported in the (KenolKobil) reports,” he said.

Instead, he attributed the rising cost of petroleum products in the country to the cost of processing and currency fluctuations.

The PS defended the Sh160 million ($2 million) arising out of a revised Bill of Lading due to a ship-to-ship operation, which the KenolKobil GM said, violates the industry Open Tender System (OTS) terms and conditions.

“It was agreed that the ship-to-ship operation is a normal industry practice.

The industry players agreed to pay it (now) but also agreed that the OTS documents be reviewed so that speculative trading is not allowed in future,” said the PS.

KenolKobil’s strongly worded statement is a continuation of a long-running war of words it has been having with both the ministry and KPRL, which saw the latter threatening to withdraw the oil marketer’s license.

A spot check in Nairobi’s CBD yesterday revealed KenolKobil’s outlets had increased petrol to Sh96.40 and diesel Sh86.40 on Koinange street.

Shell on Kenyatta Avenue adjusted petrol to Sh95.90 and diesel Sh85.90.

Total on Kimathi street sold petrol for Sh94.50 and diesel Sh84.50.