A Kobil station along Koinange Street in Nairobi. KenolKobil has sued the Kenya Petroleum Refineries Ltd (KPRL) for Sh3.1 billion. Photo/FILE
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KenolKobil claims that the petroleum products were being held in trust by KPRL and the cargo was to be released to the marketer when the refinery changed to a merchant facility.
KenolKobil has sued the Kenya Petroleum Refineries Ltd (KPRL) for Sh3.1 billion, deepening the woes of Kenya’s sole refinery.
The oil marketer is demanding that KPRL pays it Sh1.9 billion for holding its petroleum stocks and Sh1.2 billion for loss of business after the refinery failed to deliver 15,000 tonnes of gasoline blending product known as TOPS.
KenolKobil claims that the petroleum products were being held in trust by KPRL and the cargo was to be released to the marketer when the refinery changed to a merchant facility.
A merchant facility allows the refinery to import its own crude, refine and sell to local and international marketers as opposed to the previous regime where it processed crude on behalf of oil marketers for a fee.
The refinery recently warned that it would find it difficult to operate following what it called boycott of its product by the marketers — who claim the facility is inefficient and that they are better off importing refined petroleum products.
KenolKobil says KPRL was supposed to buy the oil products from the marketers prior to the conversion to merchant refinery last August.
It fears that the refinery may convert the products to its own use, adding that it is incurring huge financing costs because it used bank loans to buy the products.
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