Oil sector to break Sh100 mark over refinery's new fees
Kenya Petroleum Refineries Ltd (KPRL) has given fuel marketers notice of intention to increase processing fees due to rising costs of operations.
Chief Operating officer John Mruttu, said marginal processing fee for standard feed stock had not been adjusted for several years and charges for the service have to be increased due to escalating operating costs.
“We hereby give three months notice of adjustment of fees from Sh76 ($0.95) to Sh108 ($1.35) per barrel,” he said in a letter sent on September 17, 2010 to chief executives of oil marketing companies.
Mr Mruttu said the fees shall take effect from January 2011.
The Mombasa based refinery also intendeds to adjust upwards fuel loading fees with effect from April 1 next year citing the same reasons.
He said fees for fuel oil loading had remained same since commissioning of the facility several years ago at Changamwe in Mombasa and the fee will be adjusted from Sh360 ($4.50) to Sh480 ($6).
The move by KPRL comes when its feared that cost of manufacturing goods and provision of services is likely to go up as result of increasing prices of petroleum products with consumers bearing the brunt.
Petrol prices in Nairobi are expected to break the Sh100 per litre mark on due to international crude oil cost escalation.
Petrol’s highest price in Nairobi on Wednesday was Sh99.40 and crude oil traded at an average of Sh6,608 ($82.60) per barrel.
International Energy Agency (IEA) in its June 2010 outlook said oil and natural gas markets are still uncertain, but both share need for more investment, improved energy efficiency and better data.
