Oil firm and refinery row rages on
Termination of KenolKobil’s agreement in July this year led to Open Tender System (OTS) and Ullage (storage space). Photo/FILE
KenolKobil has 14 days to show cause why its import licences should not be revoked for failing to process crude oil at Mombasa based refinery.
Energy Regulatory Commission (ERC) said terms of business licence numbers 00315 and 00316 of Kenya Oil Company Ltd (Kenol) and Kobil Petroleum Ltd (Kobil) respectively have been breached.
Director general Kaburu Mwirichia said the permits were issued under Energy Act of 2006 for import, export and wholesale of petroleum products except liquefied petroleum gas.
Commission was advised
He said in a letter sent to KenolKobil that the commission had been advised by Kenya Petroleum Refineries Ltd that they stopped processing crude oil for the marketer on July 13, 2010.
“In accordance with section 85 of Energy Act, you have 14 days from date of service of this letter to show cause why above licences should not be revoked,” said the letter sent to oil firm’s managing director Jacob Segman.
In reply, KenolKobil said in a letter sent to ERC through Shapley Barret & Advocates that KPRL breached Energy Act by stopping processing crude for the firm without authority or approval of the regulator
“We are surprised ERC has not asked KPRL to show cause why its licence should not be revoked for this blatant and glaring breach of law and its licence requirements,” said the letter dated August 21.
