Kenya: KenolKobil Atrributes Fuel Smuggling for Price Rise
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Friday, 27 November 2009 |
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KenolKobil has justified recent increase in fuel prices reflecting
higher fuel import costs resulting from increased fuel smuggling
incidences along the Somali coastline as well as the affect it is
having on fuel supply import routes.
KenolKobil said recent incidences of piracy attacks along the Indian
Ocean shipping route has put at risk uninterrupted supply of petroleum
products to east Africa. "There are all indications that the entire
Indian Ocean will be declared a ‘war risk zone’ by vessel owners," said
the company in a statement this week.
KenolKobil said vessels sailing on Indian Ocean waters are charging
high fees for deviating away from the pirate-ridden Somali waters, and
paying more for insurance. These added expenses have increased the cost
of products. "Reluctance by vessel owners to sail the Indian Ocean
route is likely to affect fuel flow to local and regional markets that
depend on Kenya and Tanzania for supplies," the company said.
Other indications that Kenyans will likely pay more to fuel their cars
in December, are increased costs of crude oil prices, which averaged
$80 a barrel this month when supplies for December were bought.
Oil marketers have, in recent weeks, adjusted pump prices upwards, with
premium petrol retailing at more than Sh86, and Sh78 for diesel, the
highest this year. Petrol projected is further predicted to hit the
Sh90 mark before end of year.
KenolKobil also announced that it had won the industry open tender for
the delivery of crude oil and diesel for January next year.
The company will deliver the two crude oil cargoes, amounting to
160,000 tonnes of Murban Crude, for refining at the Mombasa-based
refinery, and therafter for consumption in the local, and regional
markets. The company has also won a tender to supply 40,000 tonnes of
diesel for delivery by end December, in the tender floated by the
Ministry of Energy.
PetrolWorld 261109
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