KenolKobil fights Hashi takeover of city petrol station


Hashi Energy signpost at the petrol station on Argwings Kodhek Road July 9, 2013. KenolKobil has taken rival Hashi Energy to court over alleged violent takeover of the petroleum station. Diana Ngila

KenolKobil has taken rival oil dealer Hashi Energy to court over alleged violent takeover of its prime petroleum station on Argwings Kodhek Road.

KenolKobil claims armed gang of more than 20 people raided the petrol station on Friday night and kicked out its staff and rebranded the outlet with Hashi Energy logo.

Kenol has been running the station for the past 13 years under a lease agreement and owner of the property sold it to Hashi, which has been selling fuel on the outlet since Saturday, prompting the court action.

“Saturday in the morning, I went to the suit property, and witnessed the fact that the second defendant (Hashi Energy) was purporting to change the logo of the petrol station to its name,” says David Ohana, the KenolKobil CEO, in court documents.

KenolKobil wants Alfaways — the owner of the property — compelled to sell the petrol station and jointly with Hashi pay the damages that stands at more than Sh48 million. Hashi had not filled its replying affidavits.

The dispute over the station started in 2010 when the owner of the premises, who had inked the original contract with Kenol, sold it to Alfaways Limited.

This prompted Kenol to move to court on grounds that their lease agreements provided that it be offered priority in buying the property.

But Kenol in court documents reckons that it was not given the first right to acquire the property and instead Alfaways sold it to rival oil dealer Hashi.

The battle for the station offers a peek into the ongoing battle for control of Kenya’s oil market that has seen multinationals like Shell, Total and Kenol shed market share to the small dealers.

Market share

Data from the Petroleum Institute of East Africa, the industry lobby, shows that the market share of the multinationals dropped to 67 per cent last year from 74.7 per cent in 2010 and 85.5 per cent in 2007.

Smaller dealers like National Oil Corporation, Hashi Energy, Bakri, and Gulf Energy have increased their combined market share from 25.3 per cent to 33 per cent in the same period.

In December, Kenol’s stake stood at 20.8 per cent while that of Hashi was at 3.7 per cent.

The legal battle comes when Kenol, which is associated with former powerful Cabinet minister Nicholas Biwott, is faced with a host of internal challenges and external threats to its business.

The firm has been locked from the two key avenues of procuring oil —the Open Tender System and Kenya Petroleum Refineries Limited over contractual disputes.

It reversed a profit of Sh3.2 billion to post a loss of Sh6 billion and its share has plunged 40.9 per cent over the past six months to Sh8, making it the worst performing counter on the Nairobi bourse over the period.