New fuel inspector launches laboratory in readiness for task

Kenya’s consumer standards body last week installed a new fuel inspection firm, Geo Chem, in what it termed an attempt to safeguard the quality and quantity of imports.

As the Kenya Revenue Authority’s (KRA) Customs department is already charged with inspecting all imports, oil marketers are accusing Kebs of unnecessary duplication.

The Petroleum Institute for East Africa (PIEA) has termed the additional requirement a duplication of efforts as such tests are already being carried out by companies accredited by Kenya Pipeline Company (KPC) as well as the Kenya Petroleum refineries Limited (KPRL).

They warn that any extra costs incurred by oil importers will be passed on to consumers.

At present, marketers pay the two international firms Sh1.50 for every tonne of imported crude oil and Sh9.50 per tonne of refined products in addition to value added tax of 16 per cent.

The energy ministry says it is premature for the industry to start to anticipate an increase in petroleum prices.

Before any vessel discharges its cargo, samples are collected from on board and tested to ensure that the product meets pre-determined standards and will not contaminate products already in storage at the Kipevu Oil Storage Facility or any other customs bonded warehouse.

Apart from fuel products, all imports with freight-on-board value of more than Sh40 billion, must undergo a pre-shipment inspection for quality, quantity and price.

Business Daily’s Zeddy Sambu Interviewed Mr Rajiv Bahl, Geo Chem’s managing director.

Are you ready for the task at hand?

We are fully prepared to do the job and will not be influenced by anyone. We are currently restricting ourselves to the inspection of refined products only, not crude.

It takes about 20 days to develop a fixed laboratory for testing and inspection of fuel for standards but 15 days after winning the open international tender we have managed to put up a state of the art facility that conforms with international standards.

What international standards are these?

We will follow the procedures outlined by the American Institute of Testing Services and the British Institute of Petroleum as these have been adopted as the international set of standards.

Kenya Bureau of Standards has adopted these standards to will guide our operations.

We are a member of the Indian Bureau of Standards and act as their agent for most commodities.

Geo Chem is accredited by the International Federation of Inspection Agencies, a grouping of international inspection companies. Inspection is a business of trust.

We are an Asian-oriented company but are now spreading out to new business frontiers, including Africa.

How was your company picked?

Kebs do not have laboratories that meet international standards. Geo Chem Middle East can provide them with that service.

Currently, the local inspection business is quite monopolistic, with a few companies privileged to have entered into private arrangements with the Kenyan-based oil marketers.

The two existing private surveyors do not have laboratories. The government has told us that pump volumes are higher than the volume of imports declared.

We will strive to harmonise the two. The tender is period-specific but has a clause for renewal. From past experience, Kebs has taken over as soon as projects have taken off.

So why do you think you have you taken so much flak from your competitors?

At present, the government is at the mercy of importers and private surveyors. Quality standards are unclear and the exact quantities of fuel imports are also unknown.