Is the audit out to the public?

CMA wanalala. If a firm issues quarterly results then it should be consistent. Unfortunately, in Kenya, it seems the CMA has no clue.

OMCs have said KPRL is inefficient. If KPRL can survive as a Merchant Refinery without off-take agreements, then let it do so. OMCs should not have any reason to import fuel if the prices from KPRL are the same or lower than imported fuel. Of course, KPRL can pay up the Shs 7bn & make the problem go away...

@vvs, omera, KPRL can't even pay 1B bwana! Those Essar guys are too broke. I am sure they are waiting for break up value of the refinery because government doesn't trust them to invest tax payers money. At least Orange puts in money and cons government!

By CONSTANT MUNDA
ESSAR Oil has indicated it will not allow Kenya Petroleum Refineries Ltd (KPRL) closed before it fully recovers its investment in the facility. KPRL chief executive Brij Bansal said the firm has yet to recover its “huge” investment. When it bought the 50 per cent stake from Shell, Chevron and BP in July 2009, Essar did not disclose the transaction amount.

The firm, however, disclosed the deal included a plan to pump in between $400 and 450 million(Sh3.4 to Sh3.83 billion) to upgrade the facility. The other partner – the government – has been largely mum over the push to close the 53-year old refinery although the regulator, Energy Regulatory Commission (ERC), has said the facility was a burden to consumers.

ERC has indirectly supported oil marketers’ push to turn the refinery into a strategic oil reserve. Long overdue Its recent damning assessment has shown that refined fuel imports were at least Sh5.83 billion ($68.6 million) cheaper than fuel processed at the facility.

Oil industry corporate chiefs have argued an oil reserve was long overdue to hedge against market fluctuations – the effect of which is a major threat to the stability of an economy dependent on petroleum products by more than 80 per cent.

“An economy of the size of Kenya that serves the region needs to have a reserve,” said a CEO of a major oil company who declined to be named. “We certainly need a refinery in future when we have our own oil but right now it’s better if it’s changed to a storage facility,” the source said.

The growing talk of a strategic reserve is, however, not new. In June 2010, the then ministry of Energy had publicly announced plans to set up a reserve that could hold fuel that can last the country three months.

KPRL top management, however, reads sabotage in the new push. The People has learnt oil marketers have not signed uptake agreements as they protest a rule that requires them to collect 40 percent of their fuel requirements from the facility. “We cannot push oil marketers to collect their stock push,” Bansal told The People.