Today's Headlines
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- Consumers Grow Despite Inflation
- Poor Relations Between Banks Blamed for Cash Shortages
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Justus Ondari
8 September 2010
Nairobi — The saga surrounding KenolKobil took a new turn on Wednesday when the industry regulator insisted that the oil marketer's importation licence remained suspended, throwing a spanner in the works of a company fighting for its life.
This comes just five days after KenolKobil sought court injunction against the revocation of its fuel importation licence by the Energy Regulatory Commission (ERC) over a long-standing dispute with the Kenya Oil Refineries Ltd.
ERC Director-General Kaburu Mwirichia said KenolKobil had obtained the court order after the grace period lapsed, thus voiding its application.
The oil marketer had moved to court on Friday seeking to block ERC from cancelling its licence pending the hearing and determination of its case pending in court.
"We gave them a notice that expired on Tuesday (August 31). They obtained the court order on Friday (September 3) 5pm when we had already taken action on Thursday (September 2)," Mr Mwirichia said. "They can do other businesses but they cannot import petrol, diesel, kerosene and jet fuel for this market."
Suspension of the import licence would effectively push it out of the fuel business, in which it is second after Total, with close to 150 retail outlets spread across the country.
Mr Mwirichia said the government would take "further action" against the company if it defies the order.
"We are consulting our lawyers to get their legal opinion on how to proceed," he said on the sidelines of a function to commission the 5.1MW Ngong Wind farm near Ngong Town.
KenolKobil's public relations manager Charles Njogu said the order "affects KPLR, and not ERC" but said he could not comment further.
ERC had given the company 14 days within which to act against accusations of breaching oil industry rules on processing crude at the Mombasa-based refinery.
The company has not processed crude oil at Kenya Petroleum Refineries Ltd since mid July, when it was locked out for not paying processing fees amounting to Sh456 million.
Contested the amount
It has contested the amount, which was later revised to Sh600 million.
In a tug of war that has been running for months and is subject of court cases both in Kenya and London, KenolKobil lodged a counter-claim of over Sh2 billion, which was increased to Sh4 billion, against the refinery for loss of business.
KenolKobil's lawyers, Shapley Barret & Company advocates have written to Mr Mwirichia saying the company has delivered to the refinery 60,000 metric tonnes of petroleum.
In the letter, the law firm says KPLR had misled ERC that the company had breached the legal notice of 2003 by refusing to process their crude oil at the refinery.
"The Energy Act 2006 mandates you as the regulator to ensure that KPLR complies with the law," said the letter, sent a day after the company sought further orders against ERC to act on its complaint against KPRL.
