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- May 11, 2013
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The Kenya Pipeline Company (KPC) says it has recorded a 20 per cent growth in export volumes barely a week after introducing a new lower tariff for transporting fuel.
The company has exported an extra 5 million litres of fuel since April 1 when the tariff came into effect, up from the previous average of 3.5 million litres per week.
KPC introduced a 30 per cent discount on all transit products in its western Kenya depots in a move to win back the regional market from Tanzania.
Oil marketers are now paying Sh4,238 per 1000 litres from the previous Sh6,050 per 1000 litres.
“The new Sinendet-Kisumu pipeline has increased product flow to Kisumu depot to 350,000 litres per hour from the previous 110,000 litres per hour thus increasing the country’s competitive edge in the region as a leading petroleum products exporter,” said Energy Cabinet Secretary Charles Keter during the official launch of the promotional tariff in Kisumu.
The minister said the move to slash tariffs had enhanced petroleum availability in western Kenya as well as in Uganda, eastern Democratic Republic of Congo, Rwanda, Burundi and northern Tanzania.
Countries in the region have increased fuel imports through Dar es Salaam after transporters claimed Kenya’s route was costly and experienced contamination of cargo.
“The promotional tariff we are launching is expected to reduce the cost of doing business for oil marketing companies, many of whom had shifted to Dar-es-salaam, Tanzania and we now want them back,” said KPC managing director Joe Sang.
The annual demand for petroleum products in Western Kenya is approximately 1.1 billion litres whereas the regional demand stands at 3.3 billion litres.
Regional hub
CS Keter said the government will also introduce a raft of policy measures to support development of the petroleum sector with a view to securing Kenya’s position as the regional hub.
“The measures set to be introduced include having a footprint in Rwanda, Uganda, Burundi, Eastern DRC, South Sudan and even the Central African Republic. So prioritising export loading by dedicating arms based on the demand and clearing all non-tariff barriers to boost business in league with other government agencies remain our number one priority,” said Mr Keter.
He also confirmed that talks were underway with the Kenya Revenue Authority (KRA) with a view to making KPC storage facilities bonded in order to ease cash flow for oil marketers and with Kenya Power to secure uninterrupted connectivity.
KPC says it is planning to begin construction of an oil jetty in Kisumu this month to facilitate safe transportation of petroleum products through Lake Victoria to neighbouring countries.
The jetty’s target market will be around the lake, with a view to expanding into Uganda and mines in northern Tanzania.
http://www.businessdailyafrica.com/...nia-exports/539550-3884466-3xc4yiz/index.html
