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State lifts ban on oil import

Wednesday January 12 2011
oil

The Kipevu oil terminus at the port of Mombasa. Photo/LABAN WALLOGA

The Ministry of Energy has lifted a ban imposed last year barring Kenyan based fuel marketing companies from importing private cargoes of refined petroleum products.

Energy PS Patrick Nyoike said firms are free to make private imports outside the ministry supervised open tender system (OTS) though it will not be moved inland by Kenya Pipeline Company (KPC).

He said during a meeting with chief executives of oil dealers that tankers ferrying individual cargoes must offload at Shimanzi Oil Terminal in Mombasa as private imports will not be accommodated in pipeline system.

Mr Nyoike said private imports were banned last year as the cargoes led to congestion at Kipevu Oil Storage Facility and constrained offloading of refined fuel due to lack of storage space.

Shell and Total and other firms said Kenya Petroleum Refineries Ltd should not pass to marketers huge loss arising from yielding less fuel than expected referred to as yield shifts without consent from the industry.

“If KPRL cannot agree on the cast numbers as a result of price controls they should surrender the facility to KPC to be used for storage. KPRL should, however, invest in upgrade programmes of the refinery,” they said.

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Minutes of the January 6, 2011 meeting held in Nairobi show participants agreed National Oil Corporation of Kenya (Nock) has to procure its allocation of 30 per cent of the country’s fuel needs through centralised OTS.

Mr Nyoike said Nock will start importing its allocation of crude oil, refined petrol and diesel by floating bids through OTS to obtain competitive prices with those submitting lowest being awarded contract to the corporation.

He said Legal notice No. 96 published in June 2010 mandates the State corporation to procure 30 per cent of fuel requirements under Energy (Importation of Petroleum Products) (Quota Allocation) Regulations.

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