Jun 25, 2013
General
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A cartel in the oil industry has been blamed for the problems at Kenya Petroleum Refinery Limited.

A cartel in the oil industry has been blamed for the problems at Kenya Petroleum Refinery Limited.

The company’s board of directors says there is a scheme by the cartel to have the refinery at Changamwe closed down.

Board chairman Suleiman Shakombo said the cartel — comprising oil marketers, dealers, multinational fuel companies and other stakeholders — was behind rumours and a campaign to have Kenya’s only refinery shut.

They hope that the closure would see them control the importation of oil.

“It’s the same cartel that influenced the closure of Tanzania’s oil refinery 15 years ago. Today, the cost of fuel in Tanzania is twice as expensive as in Kenya as a result of import monopoly controlled by marketers,” said Mr Shakombo.

The former Likoni MP warned that if the government falls prey to “these machinations by marketers”, the oil sector would suffer irreparably.

He was addressing the Parliamentary Committee on Energy, Information and Communication during their tour of the facility.

Open tender system

Mr Shakombo told the committee led by Kigumo MP Jamleck Kamau that in 2012 Kenya entered into an international agreement for the open tender system under which it has been operating to import crude oil.

He said after killing the Tanzanian oil refining sector, the marketers had become “super-rich” as they controlled 60 per cent of every importation. “Imagine how much oil is imported in a year. Only one ship brings in 80,000 metric tonnes and each tonne contains seven barrels of oil,” he said.

The chairman said a report prepared by Standard Chartered Bank on the viability of the refinery was ready.
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