Diesel supply-Kenya - Energy permanent secretary Patrick Nyoike yesterday moved to assure the nation that there would be no supply shortages of diesel despite a statement issued by the industry supply coordination committee warning of a looming shortage. At the same time the PS waded into the escalating war of words between two industry players the National Oil Corporation of Kenya and Shell. The two have issued scathing statements attacking each other causing confusion in the market.

Nyoike speaking on phone told the Star that 23,000 metric tons would be pumped from Mombasa to Nairobi yesterday to meet demand "There is no shortage," the PS said.

He further confirmed that the 47,000MT shipment from Nock was expected to arrive at the port of Mombasa by 8PM last night. "When I realized there would be a delay, I didn't want to take any risks," Nyoike said explaining the need for an emergency industry tender.

The tender was won by Galana Oil which quoted a price of US$34.49 per metric ton. Galana beat out Shell ($44.40), Gulf ($36.45) and KenolKobil ($34.95). The shipment is expected to arrive between the 19 and 20 March and is for 45,000metric tons.

In addition the PS indicated that KenolKobil would also be shipping in a consignment of diesel. Fears of a diesel shortage were first raised by Shell Kenya chairman Jimmy Mugerwa who also chairs the industry supply coordination committee. "It is clear that NOCK has failed to deliver the second February industry cargo and is now coming up with all sorts of excuses to explain their failure to deliver," Mugerwa said.

Nock immediately hit back. "National Oil would like to make public our displeasure with the manner by which Kenya Shell has handled this matter. In a blatant abuse of position, Kenya Shell, which is the Industry Supply Coordinator, placed an order with our consignment, just to later withdraw, thereby significantly reducing the quantities of diesel to be imported," Summaya Athmani, the acting Nock MD said. "They thereafter attempted to create panic with allegations that National Oil has been unable to deliver diesel to the country and that a nationwide shortage was imminent."

Asked to comment, Energy PS Nyoike said both companies were not giving the whole truth. "The truth lies somewhere between," Nyoike said. "I will talk to them to establish who is telling the truth."

James Mbugua

Nairobi Star/03/03/2011