KenolKobil lodges complaint with ERC

Oil marketer KenolKobil on Monday said it has lodged a complaint with the Energy Regulatory Commission (ERC), accusing Kenya Petroleum Refinery Limited of failing to process its crude imports.

The long-running spat between KenolKobil and KPRL took a new twist when ERC last week asked KenolKobil to explain why it should not be penalised for not complying with a law that requires all oil marketers to refine at least 40 per cent of their products at the national refinery.

“You have 14 days from the date of service of this letter to show cause why the above licence should not be revoked,” the ERC wrote to KenolKobil in a letter dated August 17.

But in a statement to capital markets regulators, KenolKobil chairman and managing director Jacob Segman said the blame should be directed at KPRL who have stopped processing its crude imports since mid last month.

“KPRL in breach of its statutory obligations refused and/or stopped to refine KenolKobil’s crude oil. This fact is admitted by KPRL” he said.

The dispute between KPRL and KenolKobil started in 2006 with the oil refinery seeking to raise processing fees while KenolKobil protests at inefficiencies and the quality of products coming from the oil refinery.

The oil marketer said that KPRL’s claims against it stand at about Sh500 million while it claims from the oil refinery over Sh5.3 billion for lost business opportunities arising from delays and non-delivery of refined products that have exposed all oil marketers.