MPs oppose closure of Mombasa refinery

June 24, 2013
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The nine-member committee argues that the plant's role should remain in the petroleum sector adding that importing refined products will be more costly/FILE
The nine-member committee argues that the plant’s role should remain in the petroleum sector adding that importing refined products will be more costly/FILE
NAIROBI, Kenya, Jun 24 – The parliamentary committee on energy has warned against plans to shut down the Kenya Petroleum Refinery Limited (KPRL) plant in Mombasa saying instead it should be modernized to improve its efficiency.

The nine-member committee argues that the plant’s role should remain in the petroleum sector adding that importing refined products will be more costly.

Led by the chairman, Kigumo Member of Parliament Jamleck Kamau, the committee said it had commenced investigation into alleged cartels in the oil industry that might risk the closure of the facility.

Kamau said the committee will meet all stakeholders including oil marketers, the Cabinet Secretary for Energy, Davis Chirchir and Kenya Pipeline Company this week before compiling report a within a period of two weeks.

“The mandate of the committee is to address concerns raised by all the players and we will put the interest of common mwananchi first not for any individual,” Kamau said.

He said the decision to shut down the refinery is ill -advised since the demand for crude oil is likely to be high in the country following discovery of oils deposits in Turkana and continue demand from Uganda.

“It will be costly for the nation to export crude oil and refine in other countries. That is even unacceptable. Plus the plight of workers and locals depending on this factory; we need to modernise the facility and not shutting it down, ”the committee chair maintained.

The residents say the closure of the facility will affect the community living near the facility besides rendering many jobless.

The refinery performed dismally last year, with its uptake of crude oil declining by about 50 percent to 992,000 tonnes from 1.6 million tonnes in 2011.

KPRL Chief Executive Brij Bansal attributed this to a failure by oil marketers to buy refined petroleum products from the facility.

Oil marketers claim that the refinery is inefficient and too costly and want it closed.

The marketers have been pushing the government to allow them to directly import all refined petroleum products to cut on costs.

In the current arrangement, the marketers are expected to uplift 40 percent of the products of their refined products from KPRL.

Close to 1,000 employees and contractors at KPRL face an uncertain future if the government’s decision to transform the facility into a receipt terminal is implemented.

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