Geochem sets up oil inspection laboratory

Geochem Middle East, the government’s contracted fuel inspection agent, has set up a $3.5 million (about Sh270 million) laboratory for examination of oil products shipped into the country.

The Indian firm, which was unveiled by the Kenya Bureau of Standards’ (Kebs) at a ceremony in Mombasa, recently ran tests on 62,500 tonnes of aviation fuel (JET A1) and Automotive Gas Oil (diesel) imported under the centralised importation system in August.

Kebs says Geochem has adequate logistics to carry out the quality and quantity inspection service and Kebs will charge importers 35 cents for every litre of fuel product that is tested and inspected.

“Kebs have no laboratory capable with the full mandate of inspection. We have, therefore, subcontracted to Geochem to determine the quality and control it,” said Dr Kioko Mang’eli, Kebs managing director.

Dr Mang’eli said the consumer standards body expects to shore up its revenues by upto Sh24 million, from the joint venture.

“Kebs receives only Sh170 million from the Exchequer. Revenues from the new contract will enable the organisation to meet its performance contract, and implement our strategic plan,” he said.

In 2008, statistics show that fuel worth Sh350 billion was sold.

Each year, Kenya consumes up to 3.5 million tonnes of various fuel products (3.5 billion litres). The balance of the revenue after tax deductions will accrue to Geochem.

The Indian firm is urging consumers to consider the benefits of efficiency gains from the high quality fuel and not the cost.

Mr Rajiv Bahl, Geochem’s managing director said the modern laboratory will detect the level of Octane in the fuels sold and guarantees motorists efficiency of their engines.

Mr Bahl said last week that his company—an international independent inspection and testing company conforms to international standards to undertake inspection for finished products. “We will do the job without the influence of anyone,” he said.

Inspection of petroleum imports by Kebs is a legal requirement that has all along been substituted by another process being carried out by private oil companies and two inspectors— Société Générale De Surveillance SA (SGS) and Intertek International Limited (Intertek).

Now, the Industrialisation ministry wants petroleum companies to subject their fuel to the newly launched testing and inspection process in order to curb what it terms as “attempts by unscrupulous traders littering the local market with non-compliant fuel.”

“In various parts of the country, consumers have complained of adulterated fuel while vehicle dealers have complained that the cost of engine maintenance is increasing because of non-complying fuels,” said Cabinet minister, Mr Henry Kosgey.

“We have received concerns and complaints from consumers as to the quality of petroleum products being availed to the market.” Mr Kosgey said even one per cent of non-compliance is costly to the economy.