Diesel shortage fears as deliveries delayed

February 22, 2011

, NARIOBI, Kenya Feb 22 – The National Oil Corporation of Kenya (NOCK) is experiencing a delay in the delivery of 116,236 metric tonnes of diesel raising concern of a supply shortage in the country.

In January, NOCK won the open tender system tender to supply the diesel in two consignments in mid February and early March after out bidding other oil marketers.

The State owned oil marketer now says it is not clear when the first consignment of 56,500 metric tonnes would land at the port of Mombasa.

The second batch that was expected in March is for 59,736 metric tonnes.

The delay is expected to add inflationary pressure on the price of diesel in coming weeks.

In a statement, NOCK acting Managing Director Sumayya Athmani said the oil marketer remains committed to delivering the diesel at the earliest time possible.

"We have encountered a delay in the delivery of this diesel to the port of Mombasa. Such logistical delays are commonplace in the petroleum industry, as any other fuel marketer can testify. The National Oil Corporation is committed to delivery of the diesel at the earliest time possible," Ms Athmani said but did not specifically say what had caused the delay.

Oil marketers were outraged when NOCK was awarded the tender arguing the bidding price was way below theirs adding that it did not have capacity to handle such a consignment.

According to NOCK, it tendered for the consignment at $13.48 per metric tonne. The second closest bid was $28.50 per metric tonne while the two other marketers bid at $33.44 and $39.96.

Ms Athmani said the prices quoted were not inclusive of the price of the diesel itself.

"The quotes simply cover freight and premium only. On top of these prices, one needs to add the price of the diesel, which is standard according to the internationally recognized Platts Index," she said.

The government established the National Oil Corporation to stabilise and offer competitive fuel prices in the country.

"By reducing the cost at which fuel is landed in the country, National Oil is effectively reducing the end cost at which the consumers will purchase the fuel," Ms Athmani said.

NOCK is expected to issue a statement on the progress of the diesel delivery on Friday this week.

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