Oil flows out of Kenya refinery after dispute

NAIROBI – Kenya’s only oil refinery said it had resumed pumping products out, easing its storage problems after a fight between the oil marketers and the government threatened a fuel shortage.

Last week, a dispute over a new tax payment system threw the local oil industry into a crisis with prices rising sharply, alongside record world oil prices, and pumps in some towns running dry. Under new rules introduced by the government to stop tax evasion that started this month, the east African country’s oil marketers have to pay taxes on oil products in stages within a month of their release from the refinery at the port of Mombasa.”There isn’t any immediate problem.It (oil products) is moving,” Chris House, managing director of Kenya Petroleum Refineries, told Reuters.”About a week ago we were a bit tight on storage, but since then, products started to move a bit, and we are okay for the time being.”Energy Minister Simeon Nyachae last week threatened to cancel licences for some oil companies for raising prices, saying it was unjustified.A government spokesman could not immediately be reached for comment.Local newspapers reported that oil companies had yet to lower their prices, forcing taxis and public transport vehicles to either raise their fares or garage the vehicles.House said the refinery was still receiving crude oil to process for the dealers and that last weekend the refinery received a shipment of about 650 000 barrels.”Crude’s arriving.The refinery is running normally,” he said.Kenya’s oil refinery has a capacity of 85 000 barrels per day, according to the Oil and Gas Journal’s annual survey.In addition to Kenya, it also produces fuel for marketers in Uganda, Rwanda, Burundi and the Democratic Republic of Congo.-Nampa-ReutersUnder new rules introduced by the government to stop tax evasion that started this month, the east African country’s oil marketers have to pay taxes on oil products in stages within a month of their release from the refinery at the port of Mombasa.”There isn’t any immediate problem.It (oil products) is moving,” Chris House, managing director of Kenya Petroleum Refineries, told Reuters.”About a week ago we were a bit tight on storage, but since then, products started to move a bit, and we are okay for the time being.”Energy Minister Simeon Nyachae last week threatened to cancel licences for some oil companies for raising prices, saying it was unjustified.A government spokesman could not immediately be reached for comment.Local newspapers reported that oil companies had yet to lower their prices, forcing taxis and public transport vehicles to either raise their fares or garage the vehicles.House said the refinery was still receiving crude oil to process for the dealers and that last weekend the refinery received a shipment of about 650 000 barrels.”Crude’s arriving.The refinery is running normally,” he said.Kenya’s oil refinery has a capacity of 85 000 barrels per day, according to the Oil and Gas Journal’s annual survey.In addition to Kenya, it also produces fuel for marketers in Uganda, Rwanda, Burundi and the Democratic Republic of Congo.-Nampa-Reuters