Press Center | Freight Shipping Logistics News
The listed Kenyan transnational, which is estimated to command 25.75 per cent of the local retail market, bagged the deal under the so-called open tender system (OTS), a bulk buying procedure supervised by the ministry of Energy.
According to documents from a tender award meeting held on February 24 at the ministry’s head office in Nairobi and obtained by Nation, Kenol is expected to import on behalf of other marketers some 160,000 metric tonnes of crude from the oil-rich Emirate of Abu Dhabi in April.
The win by Kenol and the eventual execution of the tender are likely to provoke intense interest in an industry that is still reeling from the aftershocks of last year’s Triton scandal, whose spawn has been a slew of intermittent fuel shortages and a load of litigation.
Triton, a local oil vendor that had won a similar tender, collapsed late last year after failing to deliver to a number of vendors.
The firm, owned by runaway magnate Yagnesh Devani, and Kenya Pipeline Company are alleged to have caused some of the refined consignment to be released without the knowledge of three international financiers.
This failure caused long queues and much anguish at petroleum vendors across the country.
The scandal has greatly compromised the integrity of Kenya’s crude importation process and its cash-intensive international financing, which relies heavily on the product being used as collateral.
As a result of the resulting backlash and calls for change, OTS rules for crude oil and refined fuel imports are presently being reviewed to ensure winners do not jeopardise interests of industry players.
Interestingly, Kenol is currently locked up in a case with Kenya Petroleum Refineries Limited (KPRL), Kenya Pipeline Company (KPC) and Kenya Ports Authority (KPA) with fees levied by state-owned entities being in contention.
Kenol is an old hand on the OTS. To meet about 50 per cent of Kenya’s fuel requirements, KPRL last year processed 1.6 million tonnes of crude oil, out of which Kenol imported (40.1 per cent), Gulf Energy (40 per cent), Caltex (10.2 per cent) and Triton (9.7 per cent).
The tender documents show Kenol was lowest bidder and the firm will in April this year import two loads, each 80,000 metric tonnes, to be processed by Mombasa-based KPRL.
Kenol bid $0.878 as freight and premium to bring from Abu Dhabi to Mombasa the first cargo of crude oil expected to arrive in Kenya’s seaport from April 15 to 17 this year.
Under OTS supervised by ministry of Energy, the lowest bidder wins the tender.
Kenol also submitted a bid of $0.988 as freight and premium for second cargo with a date range of April 24 to 26, 2008.
PARASTATAL heads who signed the Mombasa port community charter risk being sacked if their agencies do not deliver on the contents of the new entity. The charter signed between the government and the private sector aims at improving the movement of cargo from the port into hinterland