The Mombasa-based oil refinery will today receive its first direct purchase of oil, 82,000 tonnes of UAE Murban crude, its chief executive said.
Until now, only fuel marketing companies have been importing crude and paying processing fees to the Mombasa refinery, which is owned by the Government and India’s Essar Energy.
The Kenya Petroleum Refineries Limited plant will add another competitor to the existing fuel marketers, which may help ease fuel shortages and high pump prices, Brij Mohan Bansal said in an interview.
Bansal said the refinery can source cheaper crude without restricting itself to a specific mix, and may even buy blended crude to lower import costs.
“The exercise has already started, and we expect the processing of this crude to start somewhere around the first week of next month,” Bansal said.
“We are in discussion with marketing companies to finalise the details of our engagements with them. We will import, process and sell the refined products to them, as we continue our processing of oil at a fee,” he added.
In June, the refinery, which processes 1.6 million tonnes of crude a year, signed a $250 million (Sh2.1 billion) credit line from Standard Chartered Bank to finance crude imports.
Its first independent purchase of crude was loaded at the port of Jebel Dhana in Abu Dhabi at a cost of $65 million. Two more ships, Bansal said, all of the same quantity, value and origin were expected to follow in August and September. “Gradually we would like to optimise on the crude mix, to find out which crude suits the refinery best,” Bansal said.
“We will compare the market which crude is cheaper, which one gives the maximum net worth value to the refinery, and that which will directly benefit the refinery and the economy.”
The country has imported Murban crude from Abu Dhabi and Saudi Arabia’s Arabian heavy and medium crude grades through an open tender system.
Fuel prices have fallen sharply after crude fell on global markets, signalling a drop in inflation in the coming months. Kenya Power said on Thursday it would reduce electricity tariffs by 10 per cent this year, due to reduced fuel prices.
