NOCK urged to get aggressive

May 21, 2011
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, NAIROBI, Kenya, May 20 – The Energy Parliamentary Committee has challenged the National Oil Corporation of Kenya (NOCK) to adopt a more aggressive approach in the pursuit of its mandate which includes price stabilisation.

Committee Member Emilio Kathuri argued that with the support of the government, NOCK should be able to guarantee the availability of petroleum products across the country at cheaper prices than those offered by private oil dealers.

"We want to see real action; we want to see NOCK having (more) outlets and we want to see them competing on the side of pricing because it appears that they have joined the cartel," the Manyatta Member of Parliament charged.

At an energy stakeholders\’ forum, the Mr Kathuri decried the corporation\’s performance saying it has failed to cushion Kenyans from the exploitation that is meted out by oil marketers who exhibited cartel-like behaviour.

Pointing out the corporation was a State body, the legislator said their main motivation should not be entirely to make profits but to ensure that Kenyans are able to access the products all the time and at affordable rates.

"They can afford to offer their products at much lower rates because they have the support of the government. They should be able to support the multinationals," he added.

The National Oil Corporation has a branch network of 70 stations which limit it in the distribution of its allocated petroleum market quota of 30 percent. However, it has recently been executing a strategy that is designed to help it increase its distribution network to 165 stations in the next three years.

The end result of this move would be to enable it grow its market share to 15 percent by 2030 and therefore go a long way in helping it to influence the market that currently controlled by multinationals.

During the meeting, the tough-talking MP also urged Energy Minister Kiraitu Murungi to crack the whip on errant firms that are bent on holding the country hostage through for instance actions that lead to fuel shortages in the country.

The country is perennially caught in a web of fuel crisis ranging from a shortage to high cost of the products even when the international prices are low.

Despite the formulation and subsequent implementation of price regulations that have capped the profit margins for oil marketers at Sh6 per litre, the government has time and again appeared helpless in reigning in on the culpable dealers.

That has not stopped it from introducing measures that it hopes will be stiff enough to deter the marketers from causing another fuel crisis. For instance, the ministry is formulating a legal notice that will limit the number of days that oil marketers can hold their petroleum products in the pipeline system to 14 days.

The legal notice also imposes harsher penalties for dealers that will not have paid taxes for their products and evacuated them from the Kenya Pipeline Company System after 10 days.

However, Mr Murungi admitted on Friday that his Ministry was under pressure to remove the price control regulations and the recently introduced measures to limit other fuel crisis in future are likely to receive the same reception from the \’powerful\’ oil firms.

Although intent on protecting consumers, the government seems ready to find a lasting solution to the fuel crisis and has invited all stakeholders to the negotiating table to get proposals on how to go about the situation.

The Energy Ministry on Friday for instance heard various recommendations that the oil sector players would like to see implemented in the whole supply chain to improve the situation.

Some of the proposals involve addressing the inefficiencies of firms such as the Kenya Petroleum Refinery Limited, the Kenya Pipeline Company and Kenya Revenue Authority which they said would account for Sh14 of the cost of a litre of petrol.

Follow us TWITTER @CapitalFM_Kenya and the author at https://twitter.com/Cirunjoroge

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