Page 12 - AfrOil Week 12 2023

AfrOil POLICY AfrOil

Kenya’s decision to nationalise fuel

imports gets support from small dealers

KENYA SMALL fuel marketers in Kenya have hailed a kerosene, mainly supply the rural economy.
decision by the government to nationalise petro- Under the United Energy Petroleum Asso-
leum product imports, a move they contend will ciation (UNEPEA), the small dealers now want
end exploitation by big players and enable them the Energy and Petroleum Regulatory Authority
to expand their market presence. (EPRA) to introduce a wholesale price to protect
Just days after Kenya announced the oper- them from exploitation by the large OMCs.
ationalisation of a government-to-government Specifically, UNEPEA is pushing EPRA to
fuel importation, ostensibly to arrest a worsen- strictly adhere to the formula of calculating
ing foreign exchange reserve crisis, the small wholesale prices for various fuel products that
oil marketers reckon the plan will also help the is enshrined in law, meaning the industry regu-
East African nation guarantee a steady supply lator must set wholesale prices in line with retail
of petroleum products while also levelling the prices that are announced every mid-month.
playing field. “When the prices are announced on the 14th,
In early March, the Kenyan government there is the wholesale cap which has never been
contracted Saudi Aramco, Emirates National enforced. We buy the products at near retail
Oil Co. (ENOC) and Abu Dhabi National Oil prices and end up with very small margins,
Co. (ADNOC) to supply petroleum products making business untenable because we operate
over the next six months to ease the pressure on at huge losses. This has forced some of us to close
dwindling reserves. shop,” Irene Kimathi, UNEPEA chairperson was
The downstream petroleum market in Kenya quoted by media outlet The Nation.
is largely skewed in favour of big oil marketing She added that in an environment where
companies (OMCs) that until the nationalisa- there are few importers, there is no competition,
tion of imports were also the main importers something that leaves the small marketers at the
through the open tender system (OTS). mercy of a few wholesalers.
Data by the Petroleum Institute of East Big oil marketers are opposed to the govern-
Africa shows that four oil majors in Kenya (Vivo ment’s deal with the state-owned Arab compa-
Energy, TotalEnergies, Rubis and Ola Energy) nies and have moved to court on the basis that
dominate the downstream market, holding a it breaches the OTS where marketers competi-
combined share of 62.47% with a huge presence tively bid to import products and that there was
in cities and major highways, where demand for no public participation and stakeholder consul-
gasoline and diesel is traditionally high. tation before the gazettement of the Petroleum
The small dealers, who largely depend on (Importation) Regulations, 2023, which is a
the oil majors for supplies of gasoline, diesel and breach of the constitution. ™

PROJECTS & COMPANIES
Lukoil says Marine XII offshore Congo

will start producing LNG in December

REPUBLIC OF CONGO RUSSIA’S largest privately owned oil producer, Production will commence at the rate of
Lukoil, says that Marine XII, a licence area 600,000 tonnes per year and rise to 3mn tpy by
located offshore the Republic of Congo (ROC) the end of 2025, he stated.
in which it is a minority shareholder, is set to Romanovsky’s remarks are in line with state-
begin producing LNG before the end of 2023. ments made previously by Eni (Italy), the oper-
Ivan Romanovsky, Lukoil’s vice president, ator of Marine XII. Eni, which holds a majority
was quoted by Russian press agencies as saying stake in the block, has already announced plans
on March 20 that Marine XII would start turn- to install two floating LNG (FLNG) vessels at the
ing out LNG in December. offshore site.

P12 www. NEWSBASE .com Week 12 23•March•2023