New twist in biting fuel shortage

By John Njiraini and Macharia Kamau

The fuel shortage crisis is set to deepen after the Government contracted a company in financial distress to import the crucial commodity for this month.

Triton Petroleum Company, which on Friday was put in receivership over a Sh1.6 billion debt, imported 56,000 tonnes of crude and refined oil against the country’s monthly demand of 80,000 tonnes. This partly fuelled the shortage.

Triton Petroleum Company was on Friday put in receivership over a Sh1.6 billion debt. [PHOTO: Jennipher Wachie/STANDARD]

However, it’s now unable to meet its contractual obligation owing to the financial crisis it is facing. The latest development has sent shockwaves in the struggling energy sector already constrained by supply predicament.

Other oil marketers are up in arms as the company that was contracted to import on their behalf is unable to supply them with the commodity.

One of them, Engen Kenya, has already written to the Ministry of Energy seeking help to recover money from Triton for breach of contract.

The revelation comes at a time when various parts of the country are experiencing a biting fuel shortage and contradicts claims by the Kenya Pipeline Company (KPC) that the shortage is a result of vandalism and power outages.

The Standard on Sunday has established that as Triton was being put in receivership on Friday for failing to meet its financial obligations, Engen was appealing to the Ministry of Energy to intervene and help it recover money it paid upfront for its share of supplies.

Triton, which entered Kenya in 2006 after acquiring Petro Oil Kenya, was put in receivership after it emerged that Kenya Commercial Bank, which has been financing its crude oil importation business, was on the verge of losing Sh1.6 billion.

"In virtue of the receivership, the powers of the directors in terms of dealing with the company’s assets have ceased. No one other than the Receivers is authorised to receive any monies due to the company or deal with the assets," read a statement by the Joint Receiver and Managers.

In a letter dated December 19, and copied to all oil marketers, Engen Managing Director Caleb Ayiku wrote to the Energy Ministry asking it to intervene and force Triton to refund Sh1 billion paid for fuel supplies.

"We write to request for the ministry’s intervention in regard to Triton’s failure to avail our supplies for October," said Ayiku, adding: "We have patiently waited for official communication from them for the last three weeks, giving them time to avail the stock, which is not forthcoming. We seek and await your intervention."

In October, Triton Petroleum won the open tender system (OTS) supervised by the Ministry of Energy to import crude oil on behalf of the country for December.

According to industry sources, the company only managed to import 56,000 tonnes, which is way below the country’s monthly requirement of 80,000 tonnes.

Industry sources say of the 56,000MT imported consignment Triton retained 26,000MT for its operations, with other marketers sharing the balance.

By yesterday, Triton was still holding more than 50 per cent of diesel storage at the Kipevu Oil Storage Facility, Mombasa, hence blocking any fresh stocks to be offloaded owing to the facility’s limited storage capacity.

The facility is owned by KPC, which has been accused of unfairly allocating large storage space to Triton despite the company only controlling four per cent market share.

Questions are being raised why KPC has been allocating large portions of storage facility to Triton while it does not have sufficient infrastructure in Nairobi or upcountry for the commodity to be distributed efficiently.

"What’s amazing is that KPC has not been declaring the stock at Kipevu in their daily stocks position report," said the source.

 

 

 

 

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