Nairobi — A section of oil marketing companies has raised concern that the Government's proposal to allocate a 30 percent import quota to the National Oil Corporation of Kenya (NOCK) will have an impact on the fuel supply chain market and may precipitate unnecessary shortages as witnessed in the past.
According to the proposals contained in the Draft Petroleum (importation) quota allocations) regulations, 2022, NOCK, the state-owned oil marketer will be allowed to import up to a third of fuel products into the country which includes diesel, petrol, kerosene, and cooking gas.
But Total Supply and Planning Manager, Susan Gacheru, while presenting her submissions during a public and stakeholder consultations workshop on the regulations, expressed doubt about whether the state oil marketer has the capacity to meet demand even as she noted that the current importing requirements are no longer based on demand but on capacity.
She remained wary of a constrained capacity that will be insufficient to meet the demand; the same concerns were raised by Martin Chomba, chair of the Petroleum Outlets Association of Kenya (POAK).
Gacheru urged the Government to consider private facilities which can be connected to the Kenya Pipeline jetty in order to meet the capacity demand.
EPRA currently oversees the importation of petroleum products through the open tender system where the lowest bidder is granted rights to import on behalf of other marketing companies
"The majority of OMCs import through the SOT and therefore the 30pc rule will impact the rest us as capacity would be constraineD, the Government should consider how well we can make use of private facilities and how we can connect them to other capacities," Gacheru said.
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Some of these private facilities fronted include Shimanzi, and Petrocity terminal which she noted are well-positioned for the importers to use.
Chomba noted that while the regulations are welcomed, it is likely to affect the efficiency and capability of delivering fuel products to Kenyans.
"Unless something is done in terms of restructuring NOCK in terms of human resources and infrastructure, I am not confident they can achieve the 30 percent, maybe they can start progressively, they don't have requisite resources, to go for that, unless financed by Treasury
Chomba also raised concerns on whether EPRA, the regulator will independently reign on NOCK, a fellow government entity should they negate or fail to come short of what is expected of them.
We urge the regulator to have a system whereby it can be effective to reign on the state oil marketer without being seen as merely ' cherry-picking, " Chumba said.
The players are also fronting for a balanced composition of the management of NOCK which should incorporate both private and public sector players.
