Kenyans have been treated to the theatre of the absurd, in which whereby a woman by the name of Ann Njeri Njoroge is claiming the MS Haigui is hers, including the oil cargo. She claims her ship moved from Jeddah to Mombasa in a record two days after loading the cargo on October 9, to arrive in
Mombasa on 11. Usually, this journey takes at least 11 days. Njeri, a school dropout, goes ahead to provide documents to prove ownership of the cargo. Those documents have since been declared as fake by SGS, an international company that has been retained by the KNBS to verify similar documents for all ships docking in Kenya.
In short, the whole saga of Ann Njeri is fabricated and that’s why she cannot even appear before the National Assembly’s Finance committee, claiming to be sick. Ann is just a front for some disgruntled forces who feel cornered out of their middleman games that they have been using to fleece Kenyans for quite some time.
Kenya imports eight shiploads of oil each month for both its consumption and export, comprising of four ships for diesel three for petrol and one for jetty fuel/kerosene. Sixty per cent of this consignment is for domestic consumption, while 40 per cent is for other markets such as Uganda, Congo, and elsewhere etc. Oil is imported based on the consumption rate, thus creating a space in the storage tanks also as Ullage.
The pipeline from Mombasa to Nairobi and other stations has been timed to be 1,150 CMB per hour. This is crucial as it determines when a new shipload is required to replenish the supply. It takes at least 40 days for the oil to be sourced, confirmed and certified for export. Due to this, Kenya has put in place a system whereby it’s predictable to estimate correctly, the time allocated for a ship to dock at the port within a turnaround of 60 days in seamless manner.
Kenyans will recall that there has been an acute fuel shortage in the past, especially around the Easter holidays of last year. This was occasioned bythe fact that as a country, we have been engaging in what is known as ‘spot purchases’, meaning when there is need for fuel, that’s when it would be sourced.
This meant that the price would go high automatically. Forty per cent of all the dollars needed per month goes to the purchase of petroleum and its products. This meant that with the scarcity of this green back due to an increase in the interest rates for the dollar purchases by the US Federal Reserve, the oil marketers find it difficult to source the same from local market. This is because the same dollars are needed to buy other essential commodities such as medicine and food items. This is a main reason why the shilling has weakened against the dollar.
The G2G agreement is to help the country to reduce this dollar crunch on a monthly basis. The government advertised for companies to bid to supply oil to the Kenyan market. Seven of them responded, and five were shortlisted since the private ones were dismissed. Three of the five companies won the tender, i.e., Saudi Aramco company, Emirates National Oil Company and Abu Dhabi National Oil Company. Through the Energy and Petroleum Authority, an open tender system has been put in place to identify compliant Oil
Marketing companies that qualify to market oil in Kenya. The criteria are very stringent such that, while it has a three-year framework, only those that are fully compliant are retained on the monthly oil supply schedule. Ann Njeri Njoroge International isn’t one of the 136 companies currently qualified to supply oil in Kenya.
The three government-owned companies from Saudi, Abu Dhabi and the Emirates were allocated to supply: two ships to Aramco (diesel), two ships to Adnoc (diesel), three ships to Enoc (petrol) and one jetty fuel/kerosene to Enoc. They then appointed Galana, Oryx and Gulf Energy as their main agents in Kenyato deal with their businesses, instead of their coming to register in Kenya. These three companies are some of the most competent ones, with Galana having operated in Kenya since 2005.
KCB has been appointed to source for the dollars for oil importation and is able to do this since 60 per cent of all imported oil is for domestic consumption, while 40 per cent is for other markets. The local consignment is done in Kenyan shillings while the rest is in dollars.
The 180-day credit period allows the government to utilise the dollars to purchase other essential commodities such as medicine or food, while at the same time, the interest accrued by the bank, is used to offset pump prices after removal of bank charges. This arrangement alone has saved our shilling from depreciating to even Sh200 by now, if the G2G arrangement wasn’t in place.
Ann Njeri is thus but a front of disgruntled oil cartels that have been shown the door out of this arrangement, their exit is highly beneficial to Kenyans. These cartels have been relying on artificial shortages to increase fuel prices and also to benefit from the Government subsidy programme. It’s instructive to note that since the inception of G2G, there has not been any fuel shortage in the country.
Further, the Government is implementing its manifesto whereby it promised to use the ‘value chain’ model, rather than the supply chain model to help address market failure issues in the procurement and distribution of public goods. Those behind Ann Njeri should thus come clean on what is their real motive behind this obvious smear campaign against the government.
The writer is the government spokesperson