Nairobi Star (Nairobi)
Peter Kiragu
17 May 2011
KENYANS should brace themselves for more fuel shortages in the months of June and July because of market manipulation by major oil companies small oil marketers said yesterday.
An association of small oil firms warned that the country was facing the acute shortage after some major oil companies manipulated the award of supply of 95million litres of product that only caters for their requirement and locking out the small players.
According to the Petroleum Industry Association of Kenya, which represents 45 oil marketing companies, the manipulated supply tender will see the Kenya Pipeline Company system filled up by product belonging only to the majors up to the end of June, at the expense of the smaller indigenous companies. It is also unlikely that there will be an all inclusive supply tender for the month of June, the association anticipates. “The Kenyan market should expect to be at the mercy of the few major oil companies come June/July as they will be the only ones having product not forgetting the fact that they have the muscle to hold the country at ransom by arm-twisting the government and by extension the market,” a statement released by the association said.
Some of the association members include notable names like Gulf Energy, Galana Oil, Hashi Empex, Riva Petroleum Dealers, Oil Com and Hass Petroleum among others. “Systems that have been put in place and which should regulate the industry have been abandoned at the behest of the major oil companies and this will create a bigger crisis very soon,” said the statement read by Hass Petroleum chief executive Issa Sheik Mohamed. Major companies operating in Kenya include Kenya Shell, KenolKobil, Total Kenya and Oilibya.
To address the pending problem, the association has called for the implementation of the new open tender terms and curbing of arm twisting strategies. There is also need to revert to the usage of industry supply coordinator’s role. “The objective of this secretariat which until March 2011 was the preserve of only the majors have been deliberately discarded in favor of these majors’ individual interests, something which came about as a direct result of the government’s decision to co-opt the smaller indigenous companies into the secretariat much to the chagrin of the majors,” the statement added.
Further the association has recommended that the allocation of the limited KPC resources remain on the basis of individual companies’ thru-put without any deviation from the current formula.
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