Rift Valley Railways chief executive Carlos Andrade (left) and Hass Petroleum country manager Abdirizak Ahmed exchange documents after signing a Sh13 billion contract for the supply of 130 million litres of fuel over the next three years. PHOTO | DIANA NGILA |
What you need to know:
Hass Petroleum has bagged a Sh13 billion contract to supply rail operator Rift Valley Railways (RVR) with 130 million litres of diesel over the next three years.
Hass Petroleum is ranked Kenya’s eleventh oil marketer with a market share of 1.7 per cent as at March this year.
Oil marketers are turning to strategies such as signing up heavy fuel consumers and cost-cutting to widen their profit margins.
Hass Petroleum, a regional oil marketer, has bagged a Sh13 billion contract to supply rail operator Rift Valley Railways (RVR) with 130 million litres of diesel over the next three years.
The Nairobi-based fuel retailer beat five other companies to the lucrative oil supply tender floated by RVR, which runs freight services on the Kenya-Uganda railway line.
Hass will supply fuel worth Sh3.3 billion in the current year to June 2015 and the volume will increase in the succeeding years as RVR increases its cargo haulage capacity by acquiring additional wagons.
The oil dealer said it is eyeing supply deals with large fuel consumers such as companies in manufacturing, logistics, construction and international development agencies as a strategy to drive sales and grow market share.
“This tender helps us increase our footprint in the market. It also includes managing RVR fuel facilities in Kenya and Uganda,” said Abdirizak Ahmed, Hass Petroleum Kenya manager.
The order to supply 130 million litres of diesel makes up a fifth of Hass’s total annual sales volumes recorded at 600 million litres.
Kenya’s total fuel consumption remained flat at 4.6 billion litres last year, with diesel and its variants accounting for more than half of total fuel used.
Hass Petroleum is ranked Kenya’s eleventh oil marketer with a market share of 1.7 per cent as at March this year, according to the latest data from the Petroleum Institute of East Africa (PIEA).
Total is Kenya’s biggest oil marketer with a 21.2 per cent market share as at end of the first half of the year, followed by Shell (which trades locally as Vivo) with a market share of 19.1 per cent and KenolKobil with a 13.7 per cent of the market.
Mr Ahmed said Kenya accounted for 20 per cent of total turnover last year while the rest was from regional units in Tanzania, Uganda, Rwanda, Burundi, South Sudan, Somalia, Zambia and the Democratic Republic of Congo.
Oil marketers are turning to strategies such as signing up heavy fuel consumers and cost-cutting to widen their profit margins.
Listed oil marketer Total last month won a lucrative multi-billion shilling contract to supply the Kenya Police with fuel, a deal which could help it widen its market share lead on rivals.
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