NAIROBI, Kenya, Apr 8 – Kenya’s largest oil marketing company by market share, Kenol Kobil, issued a warning of an increase to pump prices on Wednesday, in what it attributed to a weakening shilling.
The company’s Assistant General Manager – Kenya Isaac Gachuriah said a weakening shilling, low performance of the Mombasa-based refinery, coupled with a sharp increase in financing costs between January and March following the Triton oil scandal were leading to inevitable price increases.
“Given these multiple factors affecting the industry, all indications are that consumers should brace themselves for an increase in pump prices,” he said in a statement.
Petroleum prices have already gone up by an average of Sh2 at Kenol Kobil stations countrywide.
But other industry players have disagreed with Kenol Kobil’s justification and have questioned the company’s move.
In an interview with Capital Business, Gulf Africa Managing Director Francis Njogu observed that the dollar has been exchanging at an average rate of Sh80 since January and the refinery’s performance had picked up in the last one month.
“The refinery is doing quite well since the end of February,” Mr Njogu said.
He said the only major changes in the sector were the recently effected new tariffs by the Kenya pipeline company (KPC) on transportation and storage charges that will see them pay 38 percent more for petroleum products transported through the KPC system.
“In my view the statement from Kenol Kobil is their view and not the view of all market players,” Mr Njogu added.
Government-owned National Oil Corporation agrees with Gulf Energy with a source from the company noting that the new tariff from KPC could only translate to an increase of a shilling, which in any case, does not have to be effected immediately.
According to Kenya Shell External Affairs Manager, Mwaura Ngari the company has not reviewed its prices neither up nor down.
“A price review is an exercise we conduct regularly and we will communicate if there is anything to say. However I can categorically state Kenol Kobil is not talking on our behalf,” Mr Ngari said.