If the sector regulator has its way, Nock will ship in 30 percent of Kenya’s super, diesel, kerosene and cooking gas and the imports will be used to provide strategic stocks for the country.
The proposals are contained in the Draft Petroleum (Importation) (Quota Allocations) Regulations, 2022 and are aimed at boosting Nock’s cash flows in an industry where it has struggled to keep pace with multinationals.
Currently, the Ministry of Petroleum and Energy and Petroleum Regulatory Authority (Epra) oversees the importation of petroleum products through the Open Tender System.
The National Oil Corporation of Kenya (Nock) will be handed exclusive rights to import a third of all fuel products into the country, in changes aimed at protecting the parastatal in a deep financial crisis.
If the sector regulator has its way, Nock will ship in 30 percent of Kenya’s super, diesel, kerosene and cooking gas and the imports will be used to provide strategic stocks for the country and avert shortage of the commodities mainly due to disruptions globally.
The proposals are contained in the Draft Petroleum (Importation) (Quota Allocations) Regulations, 2022 and are aimed at boosting Nock’s cash flows in an industry where it has struggled to keep pace with multinationals. But they are likely to be met by stiff opposition from the rest of the industry players since they would tip the scales in favour of Nock.
Currently, the Ministry of Petroleum and Energy and Petroleum Regulatory Authority (Epra) oversees the importation of petroleum products through the Open Tender System where the lowest bidder is awarded a tender to import on behalf of all the other oil marketing companies.
“The Petroleum Products Quota Allocation shall be imported by the National Oil Corporation of Kenya,” reads draft regulations that were published by the Energy and Petroleum Regulatory Authority last month for public scrutiny.
The proposed changes, if approved, will hand Nock a lifeline at a time growing losses have hurt efforts to keep pace with competition from the well-funded multinationals like TotalEnergies, Rubis and Vivo Energy.
Nock slumped into a Sh689 million loss in the six months ended December and its chief executive Gideon Morintat told Parliament that its full-year losses are projected at Sh1.4 billion.
The agency was formed to stabilise and influence pump prices but has been forced to follow the dictates of the market controlled by the multinationals.
Vivo Energy Kenya, the retailer of Shell-branded fuel products controls 21.7 percent of the market followed by Total Energies at 16.4 percent and Rubis at 8.6 percent.
