Kenol-Kobil blames piracy for hike in fuel prices

By Macharia Kamau

KenolKobil has justified recent increase in fuel prices. citing high importation costs resulting from increased piracy incidences along the Somali coastline.

The oil marketer further said hijacking incidences at the Gulf of Aden threaten to destabilise supply of oil products to local and regional markets, as many vessel owners are reluctant to let their ships ply the route.

Supply at risk

KenolKobil said recent incidences of piracy attacks along the Indian Ocean shipping route has put at risk uninterrupted supply of petroleum products to east Africa.

"There are all indications that the entire Indian Ocean will be declared a ‘war risk zone’ by vessel owners," said the company in a statement on Wednesday.

KenolKobil said vessels sailing on Indian Ocean waters are charging high fees for deviating away from the pirate-ridden Somali waters, and paying more for insurance. These added expenses have increased the cost of products.

"Reluctance by vessel owners to sail the Indian Ocean route is likely to affect fuel flow to local and regional markets that depend on Kenya and Tanzania for supplies," the company said.

Other indications that Kenyans will likely pay more to fuel their cars in December, are increased costs of crude oil prices, which averaged $80 a barrel this month when supplies for December were bought.

Oil marketers have, in recent weeks, adjusted pump prices upwards, with premium petrol retailing at more than Sh86, and Sh78 for diesel, the highest this year. Petrol projected is further predicted to hit the Sh90 mark before end of year.

Won tender

KenolKobil also announced that it had won the industry open tender for the delivery of crude oil and diesel for January next year.

The company will deliver the two crude oil cargoes, amounting to 160,000 tonnes of Murban Crude, for refining at the Mombasa-based refinery, and therafter for consumption in the local, and regional markets.

The company has also won a tender to supply 40,000 tonnes of diesel for delivery by end December, in the tender floated by the Ministry of Energy.

 

 

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