Inspection firm to defy Kenyan govt

March 22, 2010
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, NAIROBI, Kenya, Mar 22- A standoff between the government and a private firm contracted to inspect the quality and quantity of imported fuel is in the offing after Geo-Chem said it would defy a directive to cancel its contract.

Geo-Chem’s Spokesman Abdulsamad Ali said on Monday that the company, which had been appointed by the Kenya Bureau of Standards would continue to inspect the products until it receives communication from the government.

“Geo-Chem Limited will continue testing fuel getting into the country until the government declares otherwise. Prof John Lonyangapuo (Industrialisation PS) was fully involved in the process.  He gave a speech during the launch of Geo-Chem recently in support of Geo-Chem,” stated Mr Ali.

Last week, the government suspended the implementation of the controversial fee which saw oil marketers effect an increment of Sh3 and Sh4 per litre in protest and resolved to carry out the inspection through the standards body.

Mr Ali accused some oil marketers of peddling rumours that they were being charged a fee of between Sh2 and Sh3 for the scrutiny, adding that contrary to reports, they were charging the recommended fee of between Sh0.20 and Sh0.28 cents for every per litre fuel tested.

“There’s a lot of misinformation out there to discredit KEBS and Geo-Chem. One of them is that KEBS is charging between Sh3 and Sh4 which is a lie because even in the contract between the two companies the highest amount that is being charged is Sh0.28,” he added.

He called on the Kenya Anti Corruption Commission to investigate some testing companies that he claimed were behind some of the falsehoods.

The spokesperson defended the company saying that all they were doing was carrying out their duty as contracted to assist the government which loses Sh50 billion in taxes when fuel at the port is not declared.

At the same time, Energy Permanent Secretary Patrick Nyoike said they would be conducting an audit to determine whether the increment by oil firms was related to the inspection levy.

There has been a public outcry that despite government’s decision to reverse the implementation of the fee, the pump prices have remained high

“We need to check – relative to the price in which they brought in the fuel – what was the price previously and analyse the impact of it on the pump price. We have a Commissioner of Petroleum Energy and currently his office is doing that analysis,” the PS said.

Mr Nyoike however expressed confidence that the oil companies would lower their prices despite citing an increase in the global crude prices.

Meanwhile, KenolKobil announced a reduction of Sh0.65 per litre across its retail network on all products effective Tuesday.

General Manager David Ohana said the reduction was the portion directly equivalent to the inspection charges per litre that the companies were being charged by KEBS. He said this was the actual amount by which KenolKobil had adjusted their prices up as a result of this controversial charge.

But even with the reduction, Mr Ohana told consumers that the global market dynamics have changed with the crude Oil prices going up from $70 per barrel in February and to the current $82 per barrel, leading to a fluctuation in the retail prices.

“As KenolKobil still awaits the refund of the monies remitted for the controversial inspection fee to be refunded in line with the Government directive, we may be forced to review this reduction if the refunds will not be forthcoming within the next two weeks,” he cautioned while appealing to the relevant authorities to create an enabling environment for oil marketing companies to continue providing the market with products at reasonable rates.
 

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