Nock a bigger threat or Liberator of Kenya’s Oil Industry?

The National oil company of Kenya otherwise popularly known as NOCK was formed in the 1980’s to help stabilize fuel prices in East Africa’s biggest economy. The company came under heavy scrutiny in the past few weeks following 4 days of fuel shortages which threatened to derail the nation’s fragile economic recovery already under threat from below par rains experienced in the 1Q of 2011.
Many commentators allege that Nock has failed in its mandate of stabilizing fuel pump prices which have spiraled out of control following the unrest and revolutions which have plagued oil producing Middle East and North Africa (MENA) countries.

Nock as a Liberator of Kenya’s Crisis plagued Oil Industry

The recent announcement by NOCK in the press if fully implemented can help alleviate some of the problems which plague Kenya’s oil industry

1. Establishment of a floating Jetty-it will help alleviate some of the congestion experienced at the Kipevu oil storage facility (KOSF) in Mombasa-net effect more storage

2. The Kanga Project-under this program Nock aims to establish up to 22 mini fuel station by end of this year that will help them increase their market share from 7 to 10% by next year January. One of the reasons why Nock has failed in its mandate of stabilizing fuel prices is the lack of sufficient retail outlets which enables it to have an impact on the market i.e in case it reduces fuel prices at the pump-net effect Nock becomes a strong competitor and more influential

Nock as a threat to Kenya’s Oil Industry

Should Kenya’s oil sector players be sleepless over Nock’s rise? I think they should and here is why?

1.Buy low Sell Higher-with the establishment of the floating jetty Nock will be able to store more oil at their facilities, this will enable them to buy fuel i.e at cheaper prices and then store them and later release the stock to the market when prices are higher, they can then decide to sell the stock at lower prices, with the increase in the number of outlets they own they can perfectly execute this strategy-net effect with the thin margins in the countries oil sector, other firms will struggle to cope and they may be forced to cut on operations or even close shop.

Entire article here http://contrarianinvesti...eat-or-liberator-of.html

well @mkono Nock seem's to be in capable hands...the chairman is one of the founders of Equity Bank and their recent plans or movements suggest that their hell bent on taking more market share from the likes of KK and Total...i dont like the continued active role of the state in the oil industry...i wish they could just diinvest.

I think MOE strategy of using NOCK o stabilise the market was a good plan but they failed in its execution.

Its obvious the market is now compromised due to influx of speculators and brief case traders I think the best way to go abt this sector is liberalise it completely, but NOCK play its part in regulating the sector by sourcing cheaper fuel and selling it cheaply.

I dont think the number of outlets matters if they were to have a single outlet in each town with enough pumps they can service the nation.

I think this public-private partnership in this sector is not working well a rethink on how to make it effective is needed.

I meant KPRL and KPC this arrangement they have with private companies are not working very well.

KPC mandate should be reviewed such that ullage is allocated to companies that have outlets while those who have no outlet government should offer incentives to encourage investment in storage facilities.