KPC bets on Kisumu jetty to reclaim oil market

Kenya is looking to use the planned Kisumu oil jetty to push more petrol cargo in the neighbouring countries and win back market share lost to Tanzania.

Kenya Pipeline Corporation (KPC) communications manager Jason Nyantino yesterday said the facility, which is at the tendering stage, will enable them to fasten the transportation of oil while ensuring environmental safety.

KPC had lost the East Africa Community market to Tanzania after Rwanda and Burundi opted for the Dar es Salaam route, arguing that Kenya’s course was expensive and contaminated some products. This prompted the corporation to cut the cost of transporting fuel to neighbouring countries by nearly a third in a bid to win back business lost. Speaking to the Business Daily yesterday, Mr Nyantino said the jetty, whose construction starts next month, will help the state corporation to re-capture the lost regional petroleum market share.

“The jetty will be located at the shores of Lake Victoria next to our Kisumu offices near the airport. Our engineers are on the ground marking a suitable site. Once the tendering process is successful, we will have a ground breaking event in April,” Mr Nyantino said on phone.

Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo (DRC) import a huge percentage of their petroleum products using trucks from the Kenyan port of Mombasa to the Eldoret or Kisumu depots, a route considered expensive and inconveniencing. Refined petroleum, which forms 13 per cent of Kenya’s total exports, is the country’s third largest export product after tea and cut flowers.

Last year, Kenya exported a total of two billion litres to the five East African countries, according to data provided by KPC. In the notice published in the local dailies, KPC managing director Joe Sang said they had cut the cost of transporting fuel to all its Western Kenya depots of Kisumu and Eldoret.

This will ultimately reduce the cost of exporting fuel from the depots to the neighbouring countries by nearly a third in a bid to win back business lost to Tanzania.

The Kenya Transporters Association earlier said importers from regional countries were opting to route shipments through Tanzania because its fuel is untainted.

“Kenya’s position as the preferred petroleum importation route for landlocked East African nations is slipping out of our hands,” said the association in an earlier interview with Bloomberg.

“It’s because importers feel our fuel is contaminated. We have unscrupulous traders. We have cases where some transporters siphon fuel, add other products and when it gets to destination countries it is found to be adulterated.”

The Tanzanian government had begun the expansion of Dar port at $10 billion in a plan that includes building a new one at Bagamoyo.