Press Center | Freight Shipping Logistics News
May 4, 2011
General
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Motorists stood in long queues on Wednesday as one of the most severe and bizarre fuel shortages hit many parts of the country.
Motorists stood in long queues on Wednesday as one of the most severe and bizarre fuel shortages hit many parts of the country.
Many people ran out of fuel on the road while others were forced to leave their vehicles at home and take public transport. (IN PICTURES: Nairobi fuel crisis)
Petrol stations were forced to close after running out of fuel due to panic purchases.
The absence of petrol at the pump, particularly after the government confirmed that there was 19 million litres in storage tanks in Nairobi, is a commentary on the chaos in fuel distribution.
On Wednesday, the government passed the buck to the oil companies, accusing them of creating a shortage by refusing to order adequate stocks over the Labour Day holiday.
But even as Kenyans grappled with the shortages, the government on Wednesday maintained that there was enough fuel in the country.
Energy Permanent Secretary Patrick Nyoike passed the buck to oil marketers, charging that even though KPC tanks were full, oil companies were not picking up products from the depots.
But the crisis had for the first time exposed the mess and the in- built inefficiencies in the oil supply chain in Kenya.
For instance, it emerged on Wednesday that of the 19 million litres of petrol sitting in KPC tanks as wananchi were suffering, the largest proportion belonged to trading companies with no marketing outlets.
They were Addax Kenya Ltd, Royal Energy Ltd , Gulf Oil and an importer who signed as “one time vendor”.
How these small players came to hold so much petrol within KPC’s systems at a time when the rest of the industry was dry remains a puzzle.
The ministry of Energy co-ordinates the so-called ullage committee that decides how to allocate space in KPC storage facilities to oil companies.
Industry experts said the current mess was a build –up of several problems, including inefficiency at the Kenya Petroleum Oil Refineries (KPRL) and disputes arising from claims of discrimination in the management of the ministry of Energy-supervised Open Tender System.
Oil firms compete to import fuel for the entire country in the tender system.
Last month, a major controversy erupted when companies refused to buy petrol that had been imported on the industry’s behalf by state-owned National Oil Corporation of Kenya, claiming that NOCK had broken rules governing the Open Tender System.
For weeks, petroleum products would not move as the controversy over NOCK’s disputed cargo persisted and as KPC’s facilities got clogged up. (READ: Blame game as crude oil battles intensify)
Then there is the fact that millions of litres of petrol imported into the country by some of the big marketing companies several months ago, are currently sitting in tanks at the refinery.
“We have 32 million litres of super petrol sitting within the refinery system,” disclosed an official of Shell Kenya Ltd, who asked not to be named because of the tension in the industry.
Even after the government sold shares and ceded control of the management of refinery to Indian investors two years ago, the operations of the refinery remain a source of inefficiency in the supply chain.
In his statement on Wednesday, Mr Nyoike attributed the shortages to reluctance by oil companies to pump the stocks they were holding in Mombasa to Nairobi.
He charged that marketing companies did not request KPC to move stocks between April 29, 2011 to May 2, 2011, implying that the problem was attributable to the fact that supply chain staff did not work over the long Easter Holiday.
Currently, there are only five depots owned by oil companies. The companies with facilities are Shell, Nock, Oil Libya, Oil Corp Ltd while the last is shared between Kenol Kobil and Total.
Oil comes into Kenya in two ways: direct imports of refined products or imports of crude that is refined at the Kenya Petroleum Refineries.
Oil products must be stored in KPC Kenya Oil Storage Facility. And, under the OTS system, only one company at a time is allowed to import crude.
Kenya Pipeline and Kenya Revenue Authority were available if required to release petrol to the market, Mr Nyoike said.
The shortage persisted even as the Sh2 reduction on kerosene and diesel announced by the government to cushion Kenyans against the rising fuel costs came into effect on Wednesday.
A website, www.findfuel.crowdmap.com, directed motorists to petrol stations where they could find fuel within Nairobi and its environs.
The petrol stations included National Oil in Nairobi West, Oil Libya at Bellevue on Mombasa road, Shell Karen, Oil Libya Ngong road and Total on Argwings Kodhek road.
Others were Oil Com along Waiyaki Way, Shell Panafric, Shell Wilson Airport and Engen Kilimani.
Many bloggers posted comments on the social website twitter complaining about the fuel shortage and directing motorists to the few petrol stations that had it.
A blogger identified as Wanjiku wrote; “Long queue at Oil Libya Ngong road. Seems fuel shortage still there. So much for Kiraitu.”
Most affected was the Nairobi Central Business District where only one petrol station, Shell on University Way, had fuel, forcing desperate motorists to spend many hours on the queues due to the high demand of the commodity.
Many people ran out of fuel on the road while others were forced to leave their vehicles at home and take public transport. (IN PICTURES: Nairobi fuel crisis)
Petrol stations were forced to close after running out of fuel due to panic purchases.
The absence of petrol at the pump, particularly after the government confirmed that there was 19 million litres in storage tanks in Nairobi, is a commentary on the chaos in fuel distribution.
On Wednesday, the government passed the buck to the oil companies, accusing them of creating a shortage by refusing to order adequate stocks over the Labour Day holiday.
But even as Kenyans grappled with the shortages, the government on Wednesday maintained that there was enough fuel in the country.
Energy Permanent Secretary Patrick Nyoike passed the buck to oil marketers, charging that even though KPC tanks were full, oil companies were not picking up products from the depots.
But the crisis had for the first time exposed the mess and the in- built inefficiencies in the oil supply chain in Kenya.
For instance, it emerged on Wednesday that of the 19 million litres of petrol sitting in KPC tanks as wananchi were suffering, the largest proportion belonged to trading companies with no marketing outlets.
They were Addax Kenya Ltd, Royal Energy Ltd , Gulf Oil and an importer who signed as “one time vendor”.
How these small players came to hold so much petrol within KPC’s systems at a time when the rest of the industry was dry remains a puzzle.
The ministry of Energy co-ordinates the so-called ullage committee that decides how to allocate space in KPC storage facilities to oil companies.
Industry experts said the current mess was a build –up of several problems, including inefficiency at the Kenya Petroleum Oil Refineries (KPRL) and disputes arising from claims of discrimination in the management of the ministry of Energy-supervised Open Tender System.
Oil firms compete to import fuel for the entire country in the tender system.
Last month, a major controversy erupted when companies refused to buy petrol that had been imported on the industry’s behalf by state-owned National Oil Corporation of Kenya, claiming that NOCK had broken rules governing the Open Tender System.
For weeks, petroleum products would not move as the controversy over NOCK’s disputed cargo persisted and as KPC’s facilities got clogged up. (READ: Blame game as crude oil battles intensify)
Then there is the fact that millions of litres of petrol imported into the country by some of the big marketing companies several months ago, are currently sitting in tanks at the refinery.
“We have 32 million litres of super petrol sitting within the refinery system,” disclosed an official of Shell Kenya Ltd, who asked not to be named because of the tension in the industry.
Even after the government sold shares and ceded control of the management of refinery to Indian investors two years ago, the operations of the refinery remain a source of inefficiency in the supply chain.
In his statement on Wednesday, Mr Nyoike attributed the shortages to reluctance by oil companies to pump the stocks they were holding in Mombasa to Nairobi.
He charged that marketing companies did not request KPC to move stocks between April 29, 2011 to May 2, 2011, implying that the problem was attributable to the fact that supply chain staff did not work over the long Easter Holiday.
Currently, there are only five depots owned by oil companies. The companies with facilities are Shell, Nock, Oil Libya, Oil Corp Ltd while the last is shared between Kenol Kobil and Total.
Oil comes into Kenya in two ways: direct imports of refined products or imports of crude that is refined at the Kenya Petroleum Refineries.
Oil products must be stored in KPC Kenya Oil Storage Facility. And, under the OTS system, only one company at a time is allowed to import crude.
Kenya Pipeline and Kenya Revenue Authority were available if required to release petrol to the market, Mr Nyoike said.
The shortage persisted even as the Sh2 reduction on kerosene and diesel announced by the government to cushion Kenyans against the rising fuel costs came into effect on Wednesday.
A website, www.findfuel.crowdmap.com, directed motorists to petrol stations where they could find fuel within Nairobi and its environs.
The petrol stations included National Oil in Nairobi West, Oil Libya at Bellevue on Mombasa road, Shell Karen, Oil Libya Ngong road and Total on Argwings Kodhek road.
Others were Oil Com along Waiyaki Way, Shell Panafric, Shell Wilson Airport and Engen Kilimani.
Many bloggers posted comments on the social website twitter complaining about the fuel shortage and directing motorists to the few petrol stations that had it.
A blogger identified as Wanjiku wrote; “Long queue at Oil Libya Ngong road. Seems fuel shortage still there. So much for Kiraitu.”
Most affected was the Nairobi Central Business District where only one petrol station, Shell on University Way, had fuel, forcing desperate motorists to spend many hours on the queues due to the high demand of the commodity.
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