Nock attacks Shell as Galana wins new oil imports tender
Nock had won the tender to supply fuel in two batches with the first lot of 56,500 tonnes but Galana replaced it. Photo/FILE
National Oil Company of Kenya (Nock) is accusing its rival Shell Kenya of “deliberate and irresponsible sabotage” over actions that led to the cancellation on Friday of a tender to supply the industry with 62,000 tonnes of diesel this month.
Nock acting chief executive Sumayya Athmani, on Monday, said Shell Kenya withdrew its order of 17,000 tonnes that was to be met through the industry tender, eroding economies of scale that would have seen the diesel reach Mombasa at $13.44 per tonne above prevailing crude prices.
Emergency tender
She said this forced Nock to decline to supply the other 45,000 tonnes at the initial price under tendering rules that allow importers to retreat if the quantity is varied by more than 25 per cent. The Shell portion constituted 27.4 per cent of the consignment.
Ms Athmani said this forced the government to call for an emergency tender after Kenya Shell—the industry supply co-ordinator— “attempted to create panic with allegations that Nock has been unable to deliver diesel and that a nationwide shortage was imminent.” “This is deliberate and irresponsible sabotage by Kenya Shell. National Oil would like to make clear its intention to soon lodge a complaint with Government on the behaviour by Kenya Shell,” she said.
Going by the outcome of the March supply tender that was awarded a week ago at $31.15 per tonne, Ms Athmani said consumers would be forced to pay more per litre of diesel.
Nock said the first consignment of its February tender would arrive between today and Thursday.
Nock had won the tender to supply the fuel in two batches with the first lot of 56,500 tonnes due in the country by February 19 at the latest.
The second float was scheduled to arrive in the country this week on Thursday, but the emergency consignment is likely to arrive three weeks from now.
Galana Oil, an independent oil firm, has won the tender to ship in additional stocks to replace those by Nock after it submitted the lowest bid of $34.49 per tonne at an auction on Monday afternoon.
The company is expected to ship in 45,449 tonnes of low sulphur diesel by 20th this month.
Accused Nock
Shell Kenya had earlier on Monday accused Nock of failing to give the industry credible information on the status of the deliveries through the supply co-ordinator.
Kenya Shell country chairman Jimmy Mugerwa said in a letter to Energy permanent Secretary Patrick Nyoike that Nock’s late admission of delivery default had caused supply interruptions for over two weeks and did not provide adequate room for mitigation.
He said action should be taken on Nock for the default, exposing the state -owned marketer to fines as happened to Gapco last year.
The penalty for failure to honour the tender is $1.16 million.
