Report of flawed tender fuelling rumours – ERC

October 17, 2012
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Photo illustration of a fuel station/XINHUA-File
NAIROBI, Kenya, Oct 17 – The Energy Regulatory Commission (ERC) has denied claims appearing in a section of the media that the recent fuel hikes were due to a flawed tendering process.

ERC Director General Kaburu Mwirichia said on Wednesday that the tender which was cancelled and reissued in September, and which is claimed to have led to the increase in prices, is for crude petroleum that is scheduled to arrive next month.

“ERC’s attention has been drawn to an article insinuating that the recent increases in pump prices of petroleum products may have been as a result of petroleum procurement irregularities. We would want to state that ERC uses a formula which was gazetted under the Energy Act and the Energy (Pricing Regulations) 2010 to calculate and publish pump prices,” said Mwirichia.

He insists that the recent price increases were calculated based on cumulated costs of refined petroleum products received into the country between August 10 and September 9 and products from crude oil released from the Kenya Petroleum Refineries last month.

The tender which had earlier been won by Essar Energy and Gulf Energy was cancelled and re-issued after consultations with all key oil marketers in the country. Gulf Energy won the fresh tender to supply crude oil. The shipment is expected for delivery in November.

“The tender referred to in the said article was cancelled and the replacement cargo will be received in the country at the end of November 2012 for processing in December 2012,” Mwirichia said in defence.

After the latest fuel price review by the Energy Regulatory Commission (ERC), Super petrol went up by Sh6.31 in Nairobi to retail at Sh115.26 a litre, diesel up by Sh5.04 to Sh106.11 a litre, while kerosene went up by Sh6.36 to retail at Sh86.01 a litre up to November 15.

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