Of Oil marketers and accusations against Gulf Energy

Posted on May 9, 2011

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The past one-week, Kenyans have been treated to a rather shameful scene in a country that envisages economic prosperity in the next 19 years. Nairobi, Kenya’s capital city and economic bedrock was without super petrol for nearly one week.

The scenes were akin to what Zimbabwe was witnessing in 2005 when its strongman Robert Mugabe succeeded in running down the economy.

However, in Kenya the cause of the shortage was attributed to diverse reasons among them a refinery breakdown and delays in delivery of super petrol.

That beside the point, an oil-marketing firm Gulf has been taunted as the next Triton. With a market share of only 1.5 per cent and few petrol stations around the country Gulf Energy seems to be rubbing others the wrong way.

The firm has been winning tenders to supply the country with petroleum products under the Open Tender System. This is how the OTS works: Crude is imported through an Open Tender System (OTS), which is coordinated by the Ministry of Energy.

All the licensed importers of petroleum products are required by law to participate in the crude processing. Through this arrangement KPRL is protected through a minimum base load processing of 1.6 million tonnes of crude per year, which meets about 50 per cent of the total petroleum demand. The licensed importers share this base load prorated to their market shares.

Back to Gulf Energy, the company has managed to win some of these tenders and has been importing cargo on behalf of about the 52 registered oil-marketing firms.

But some oil marketers are not convinced that the company has been winning the tenders genuinely. The papers have carried stories of some briefcase importers and this could widely be believed to be a pointer to the paltry market share that the company has.

Still it has been linked to powerful individuals in the government specifically in the ministry of energy. Names of among others the PS in the ministry, the minister himself and several other sitting and past ministers have been associated with the company.

None of these names have solid evidence to back the claims. However in the quest to find out why all the flack the company has been receiving the search has not provided any solid evidence.

The only link, some marketers have indicated is that a family member (read a son) of one of the senior government officials in the ministry of energy is currently attached to the Gulf Energy.

We are still trying to get solid evidence to this and get a list of directorship of the company.

Other blogs that have discussed the oil fiasco include TuskerBaridii

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