Shell launches new premium fuel

November 20, 2008

, NAIROBI, November 20 – Kenya Shell Limited has said it will soon forward its suggestions to the government on the decision to re-introduce fuel price controls.

Country Chairman Ahmet Erdem told reporters on Thursday that their comments were in response to the Energy Regulatory Commission’s (ERC) invitation for the public to submit suggestions on how to work out the price control formula.

“We are a law-abiding company. We will be giving our comments and then see what the government decides to do with this (information),”he said.

The ERC on Sunday published the new mechanisms and gave members of the public 40 days to submit their views on how the regime should be effected.

The reluctance by oil marketing firms to adjust pump prices in line with a plunge in international crude oil costs has caused an outcry and forced the government to resort to price regulation, in a move to protect consumers against exploitation.

Mr Erdem was however non-committal on whether they would reduce their retail pump prices.

Global crude costs have dipped from a high of $147 per barrel in July this year to $51 per barrel on Wednesday. Locally, a litre of premium petrol was retailing at Sh110 in August but this has only dropped marginally to Sh93 per litre.

“It is not realistic to reflect a drop in the global arena in one week but we are watching the market and we are trying to do our best in pricing our products,” Erdem said during the launch of the company’s premium unleaded fuel dubbed ‘Shell V-Power’ into the Kenyan market.

The firm’s Retail Manager Lena Munuve said the launch of the product, which is designed to improve the car engine performance, would help them to recover a two percent drop in their market share and enhance their competitiveness.

According to statistics from the Petroleum Institute of East Africa, Kenya Shell controlled 22.74 percent of the market in January 2008 but this has since gone down to 20.57 percent.

Ms Munuve explained that their share of the market went down after the company acquired 50 percent stake at British Petroleum (BP), a take over that was pegged on the condition that they sell 30 percent of Kenya Shell retail stations to local dealers.

“After a preparation period of six months, we are launching Shell V-Power in Kenya. This is a significant enhancement of our fuel product portfolio which will help us to sustain our market share,” she added.

The manager said that the company has invested over Sh150 million to install storage and distribution equipment.

The petrol, which will be retailing at Sh99.90 per litre, will be available in 50 sites across the country.

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