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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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VituVingiSana wrote:News Release
DELAY IN DELIVERY OF DIESEL
Nairobi, Tuesday 21st February 2011
On Monday the 31st of January, the National Oil Corporation of Kenya released a press statement announcing that we had won the OTS tender for the supply of diesel that would be delivered in two consignments of approximately 56,500MT and 59,736MT in mid February and early March respectively.
Pursuant of this statement, the National Oil Corporation would like to announce the following;
1. We have encountered a delay in the delivery of this diesel to the port of Mombasa. Such logistical delays are commonplace in the petroleum industry, as any other fuel marketer can testify.
2. The National Oil Corporation is committed to delivery of the diesel at the earliest time possible.
3. The National Oil Corporation shall communicate on or before the end of this week (Friday the 25th of February) on the exact date that the consignment shall be expected at the port of Mombasa.
The National Oil Corporation would also like to shed some light on some queries that have been raised by members of media and the public alike.
1. The OTS tender that National Oil was awarded was for diesel fuel only.
2. The price with which National Oil won the tender was USD 13.48 per metric tonne.
3. The tender quote that was closest to ours (second best quote) was USD 28.5 per metric tonne.
4. The next best quotes were USD 33.44 and USD 39.96 per metric tonne.
Contrary to popular belief, the prices quoted above are NOT inclusive of the price of the diesel itself. The quotes simply cover freight and premium only. On top of these prices one needs to add the price of the diesel which is standard according to the internationally recognized Platts Index. It is therefore not true that National Oil shall increase the price that it had quoted and pass the price burden over to consumers. The quoted price is fixed and can not be altered.
The mandate of National Oil Corporation is to stabilize and reduce fuel prices in the country. By reducing the cost at which fuel is landed in the country, National Oil is effectively reducing the end cost at which the consumers will purchase the fuel.
National Oil is facing very fierce criticism from competitors due to the very low prices quoted in the OTS tender for diesel. From the difference in quoted prices between National Oil and other marketers, it is clear that National Oil has (in the interest of consumers and the economy at large) drastically reduced the profit margins that have traditionally been made by other marketers.
National Oil is committed to delivering cheaper fuel to help alleviate the suffering currently being experienced by Kenyans across the country.
National Oil Corporation reiterates that it is now firmly established as a key player in the Petroleum Industry, well positioned to deliver on its mandate of stabilizing the market. 1) Mid-Feb [Apparently this was supposed to be 18 Feb 2011]. NOCK " shall communicate on or before the end of this week (Friday the 25th of February) on the exact date that the consignment shall be expected at the port of Mombasa." So not even expected to be delivered 7 days late!!! 2) " Such logistical delays are commonplace in the petroleum industry, as any other fuel marketer can testify." Which ones? Bring out another major player. Also OMCs are subject to fines. 3) " ...well positioned to deliver on its mandate of stabilizing the market" Some stability! A shortage of diesel would mean disruption of our economy - even for a few days. Do not forget the planting season is coming so farmers need to use their tractors asap! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 4/25/2008 Posts: 192 Location: Nairobi
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@ VituVingiSana A little bird tells me that NOCK may be a victim of a well calculated move by some oil companies in Kenya working in cohorts with the suppliers to show that NOCK are incapable of supplying the fuel. MOE will have to call for an emergency tender that those marketers will win. Itari muting'oe ihuragwo ngi ni Ngai
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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milken wrote:@ VituVingiSana
A little bird tells me that NOCK may be a victim of a well calculated move by some oil companies in Kenya working in cohorts with the suppliers to show that NOCK are incapable of supplying the fuel. MOE will have to call for an emergency tender that those marketers will win. @milken - Lakini, there are so many suppliers of AGO in the Middle East - Iran - Dubai - Abu Dhabi - Kuwait - Qatar - Bahrain Kenya [all OMCs combined] is such a small player [India/China/Japan each buys at least 100x what we do] that does it really matter to these large firms/players to muck around with NOCK? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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milken wrote:@ VituVingiSana
A little bird tells me that NOCK may be a victim of a well calculated move by some oil companies in Kenya working in cohorts with the suppliers to show that NOCK are incapable of supplying the fuel. MOE will have to call for an emergency tender that those marketers will win. In their well calculated moves, did the OMCs also convince NOCK to bid at half the price of the next lowest bidder? 
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Rank: Member Joined: 4/25/2008 Posts: 192 Location: Nairobi
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On a point of information, that price is not low, in the past some companies have even quoted negative freight and premuim. Look I know what I know but look at this scenario 1. A tender is floated by MOE. 2. The OMCs in Kenya call the international traders for offers. The traders quotes say USD 12. 3. NOCK quotes USD13 and wins the tender. (while well conected OMCs had quoted say 40). 4. The well connected OMC (working in cohorts with the trader) is disappointed by losing the tender and hatches a scheme with the trader. 5. The trader invokes force majeure and reneges on delivery. 6. Owing to an imminent shortage MOE invites bids for an emergency tender 7. The OMC in 4. above bids at USD35 and wins. Itari muting'oe ihuragwo ngi ni Ngai
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Rank: Member Joined: 4/25/2008 Posts: 192 Location: Nairobi
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VituVingiSana wrote:@milken - Lakini, there are so many suppliers of AGO in the Middle East
- Iran
- Dubai
- Abu Dhabi
- Kuwait
- Qatar
- Bahrain
Kenya [all OMCs combined] is such a small player [India/China/Japan each buys at least 100x what we do] that does it really matter to these large firms/players to muck around with NOCK? Actually, there are very few traders interested in this market. Hence those countries may not be sources. Actually, most of Kenya AGO comes from Singapore, India, Saudi. Itari muting'oe ihuragwo ngi ni Ngai
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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milken wrote:in the past some companies have even quoted negative freight and premium. Why??? Isn't that saying it is a net loss for the importing OMC? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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milken wrote:VituVingiSana wrote:@milken - Lakini, there are so many suppliers of AGO in the Middle East
- Iran
- Dubai
- Abu Dhabi
- Kuwait
- Qatar
- Bahrain
Kenya [all OMCs combined] is such a small player [India/China/Japan each buys at least 100x what we do] that does it really matter to these large firms/players to muck around with NOCK? Actually, there are very few traders interested in this market. Hence those countries may not be sources. Actually, most of Kenya AGO comes from Singapore, India, Saudi. Since AGO is fungible [vs crude which is mainly from ADNOC coz of the qualities of the crude] why not expand our list of suppliers? AGO is produced/refined by numerous countries/firms. Seems odd that we import from Singapore! They must be very efficient refiners! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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milken wrote:On a point of information, that price is not low, in the past some companies have even quoted negative freight and premuim.
Look I know what I know but look at this scenario
1. A tender is floated by MOE.
2. The OMCs in Kenya call the international traders for offers. The traders quotes say USD 12.
3. NOCK quotes USD13 and wins the tender. (while well conected OMCs had quoted say 40).
4. The well connected OMC (working in cohorts with the trader) is disappointed by losing the tender and hatches a scheme with the trader.
5. The trader invokes force majeure and reneges on delivery.
6. Owing to an imminent shortage MOE invites bids for an emergency tender
7. The OMC in 4. above bids at USD35 and wins. I still do not understand it. The OMC in #4 will still have to compete vs other OMCs incl Addax, Gulf, KK, Total, etc so what's the benefit? Other OMCs can bid lower than $35. What benefit does the trader have in denying NOCK but supplying OMC#4 at $12 as well? It is not the only trader/supplier. When NOCK imports the 30% [with no competition] how do we trust their price is the most competitive? While NOCK can beats the other OMCs in the competitive OTS, it can over-charge when it imports the monopolistic 30%. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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KISS TV - NOCK says AGO will get in 1-3 March [original date was 17-19 Feb] Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 4/25/2008 Posts: 192 Location: Nairobi
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The only OMCs winning the refined product tenders are Addax, Gulf, Gapco, Galana. Their traders are Addax (Swiss), Trafigura (Swiss),Reliance (India)& Somebody hiding behind BNP Paribas. Anyway let us wait and see Itari muting'oe ihuragwo ngi ni Ngai
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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milken wrote:The only OMCs winning the refined product tenders are Addax, Gulf, Gapco, Galana. Their traders are Addax (Swiss), Trafigura (Swiss),Reliance (India)& Somebody hiding behind BNP Paribas. Anyway let us wait and see What concerns me is that these OMCs are not true OMCs [they own very few petrol stations] & are probably connected to the powers that be including kiraitu & nyoike. So by forcing NOCK to bid at very low rates, then force NOCK to fail, then make a killing. I hope firms like KK & Total are allowed to bid for emergency supplies/imports as well... As long as NOCK is GoK owned/controlled, nyoike & kiraitu will use it to reward their cronies [& themselves] Soon we will have politically connected Helios & trader Vitol [who bought Triton's tanks] in the mix! After assessing the players above... KK might be the only (major) good guy left! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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I just don't get it! So NOCK screws up by promising to deliver Diesel 3 weeks late [not delivered yet]. Yet they are allowed to bid for an order NOCK screwed up? @milken - You have to explain this to me! http://www.standardmedia...&utm_medium=twitter
[Of course, the media may be wrong] Questions: 1) Has NOCK bought or not bought the 2 cargoes they were supposed to deliver? The firm said it had received instructions from the Ministry of Energy to reduce the tonnage of the product from 56,000 to about half, which it said would not be possible at the prices it had quoted in the tender it won in January. Sumayya Athmani, Nock’s acting managing director, said it would not have been possible to import half the cargo at the same cost and had instead asked the ministry to call for an emergency tender.Hold on! Didn't NOCK claim the shipment was 'delayed'... seems they didn't even BUY the diesel/cargo! 2) She added that Nock would be eligible to tender.WTF? Yaani, you eff up. Then you get to bid AGAIN on the same cargo? NOCK has not even delivered ONE cargo yet want to bid again? What are they playing at? Will they now supply at a higher price? Who absorbs the loss from the higher delivery cost + higher international prices? 3) The firm said Thursday that the 59,700 metric tonne consignment is scheduled for delivery between March 1 and 3 but did not give indications as to when the 56,500 metric tonne consignment would arrive.
Yesterday, however Nock confirmed the cargo would not be coming. Didn't NOCK say: It is delayed [& normal for delays]... Now it says the 2nd cargo will NOT be coming? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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Now that there is "price control" in the oil sector, the role of NOCK in the oil business should be reviewed. The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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Meanwhile the fuel station that epitomizes the incompetence at NOCK, the ex-Caltex next to Uchumi Ngong Road, has finally managed to rebrand two out of the four pumps as at today.
To be fair to them, I suspect that the unwieldy Public Procurement Act 2005 is probably the culprit, but surely who can expect NOCK to react to global events that change by the minute in the same manner as Jacob at KK would? Then again NOCK must be swarming with briefcase businessmen whose last interest is the country.
I heard that Sumaya said their quote was not for AGO, so what was it for? It is not a new tender, it is a repeat, and ALL previous suppliers have always brought in AGO. If the supervisor of cabinet affairs doesn't step in this time, we are doomed - certainly the other principal isn't going to raise a finger. This, put simply, is economic sabotage and I'm not bitter because close to 20% of my portfolio is KK. I'm bitter because fellow kenyans are fixing us.
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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Meanwhile the fuel station that epitomizes the incompetence at NOCK, the ex-Caltex next to Uchumi Ngong Road, has finally managed to rebrand two out of the four pumps as at today.
To be fair to them, I suspect that the unwieldy Public Procurement Act 2005 is probably the culprit, but surely who can expect NOCK to react to global events that change by the minute in the same manner as Jacob at KK would? Then again NOCK must be swarming with briefcase businessmen whose last interest is the country.
I heard that Sumaya said their quote was not for AGO, so what was it for? It is not a new tender, it is a repeat, and ALL previous suppliers have always brought in AGO. If the supervisor of cabinet affairs doesn't step in this time, we are doomed - certainly the other principal isn't going to raise a finger. This, put simply, is economic sabotage and I'm not bitter because close to 20% of my portfolio is KK. I'm bitter because fellow kenyans are fixing us.
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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9.20/-??? Now what's cutting with this, our beloved counter?
BBI will solve it :)
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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I have liquidated all my holdings in KK and Total there are too many vested interests and idealists armchair oil dealers. I am not very sure oil companies will make good profits in the next two years.
Still waiting for NOCK to deliver after using briefcase dealers to source for diesel.
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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mkonomtupu wrote:I have liquidated all my holdings in KK and Total there are too many vested interests and idealists armchair oil dealers. I am not very sure oil companies will make good profits in the next two years.
Still waiting for NOCK to deliver after using briefcase dealers to source for diesel. Sorry to hear that. Of course, it hurts to see the price dropping BUT I am happy to buy more! Sigh, if I had enough cash, I would buy the entire company! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 4/25/2008 Posts: 192 Location: Nairobi
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milken wrote:@ VituVingiSana
MOE will have to call for an emergency tender that those marketers will win. An emergency tender for 45,000MT of AGO was floated yesterday. The winning bid was US$34.5. Remember NOCK had bid US$13. See Daily Nation Smart Company pg9. Itari muting'oe ihuragwo ngi ni Ngai
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