Price of fuel to go up next week: oil firm

The price of petrol could go up by as much as Sh6 a litre next week, bringing to Sh15 the total price rise in the past two months.

International oil prices are on the rise and the emergency delivery ordered to cover for the recent shortage, will lead to the new price, according to KenolKobil, one of the marketers.

Ministry of Energy officials were not immediately available for comment, but a spokesman for KenolKobil said customers will pay more.

Already, it is believed that the cargo that has been ordered from a ship that has already been loaded, will cost an average of between $40 and $50 more per metric tonne due to the nature of its sourcing.

According to industry players, the company, which wins the tender on Tuesday, will have to look at an already loaded vessel with the super petrol.

“What this means is that for us to get the vessel here at the required time, it is the vessel owner who will dictate the prices for us. As usual the additional cost will be transferred to motorists,” said one marketer.

Last week, the country experienced five days of shortage of the popular premium brand used by most private motorists. (READ: Kenya oil industry in chaos)

The Ministry of Energy had invited bids in two batches to import about 55 million litres of super petrol but failed to receive takers for first tender.

The second bid was won by Gulf Energy. This is likely to translate into a new fuel shortage in the next two-three weeks.

The government had called for a new tender to import emergency super petrol. The cargo, which will come in as a refined product, is expected in the country by May 23.

The ministry has maintained that the supply is meant to avert shortage following a breakdown at Kenya Petroleum Refineries Ltd.

Industry sources, however, told the Nation that the 50 million litres would be sold at premium prices to consumers. This is due to the nature of its importation coming at a desperate time.

According to industry players, the company which wins the tender, will have to look at an already loaded vessel with the super petrol.

“What this means is that for us to get the vessel here at the required time, it is the vessel owner who will dictate the prices for us. As usual the additional cost will be transferred to motorists,” said one marketer.

Grappling with confusion

The oil industry is still grappling with the confusion surrounding last week’s shortage of super petrol in Nairobi when motorists spent hours in long queues at filling stations where fuel was available.
Kenya Pipeline Company is said to be having enough stocks that are meant to be for the export market.

Most landlocked countries like Rwanda, Uganda and the Democratic Republic of Congo source their petrol products through the Kenyan port of Mombasa.

These are the countries that the product sitting at KPC Nairobi terminal is said to be destined for. Industry players claim that the storage space at KPC has been hogged by small firms serving the export market.

“We do not allocate storage as either local or transit; what we do is to keep it based on the marketer that brings it in,” said Mr Philip Kimelu operations manager at KPC.