Industry Overview

The Oil Industry is one of the key revenue earners for the country. Dalbit applauds the decision that was taken by the government in 1994 to deregulate the industry.

The main objective of the deregulation was to enhance competition and benefit the consumer. Deregulation has however not fully benefited the consumer due to ivarious ndustry constraints.

We commend the keen interest with which the Ministry of Energy follows the happenings in the industry and their interventions when concerns are raised on unfair practices for the benefits of the consumer.

Company Overview

Dalbit Petroleum Limited joined the industry in March 2002 and has successfully established itself in the market. Dalbit looks forward to participating and assisting in Kenya’s economic recovery.

Some challeges in the petroleum sector.

 

1. Loading Facilities For Fuel Oil And LPG

Due to the heavy capital investment for independent loading facilities, the Government can assist the minors by investing in loading facilities in Mombasa, as is the case in Nakuru, Kisumu and Eldoret where KPC loading arms are open to all oil companies. This would result in an even playing field, more competition, and hence lower prices to consumers. This is the case in Western Kenya where retail prices are lower than in Nairobi.

Opening up of similar facilities for LPG would reduce the cost of supplying the same to the consumers, which would, in turn, encourage wider usage of Gas for domestic use and hence reduce environmental damage by limiting use of charcoal and firewood. This would go a long way in the preservation of our forests and water catchment areas.

2. Kenya Railways

We would propose a railway maintenance levy from the oil companies to assist in the restoration of the Railways. This would benefit our road network by reducing traffic and over loading.

An improved railway system would increase trade within the East Africa region resulting in job preservation and increased government revenue.

3. Protection Of The Environment

In order to halt the chronic deforestation being experienced in the country (Kenya has only 1.7% forest cover and a country requires a minimum of 10% to be able to sustain its environment) Dalbit would like to see duty on Kerosene drastically reduced in order to encourage its use instead of charcoal.

4. Kenya Pipeline Corporation

Issuance of stock certificates for line fill would free up capital, which is currently ‘dead stock’. The issuance of these certificates would not cost the government money and would therefore not pose any financial constraint to the exchequer.

Retail Outlets

Although Dalbit has no immediate plans to venture into the retail business, we feel that the Government would facilitate healthy and fair retail competition by standardizing health, Safety and environmental standards through legislation.

Competition at the retail level will benefit the consumers with the resultant price reductions. This has been the case in Western Kenya where due to a large retail competition presence enabled by the available KPC loading facilities, the retail prices of petroleum products are much lower than in Nairobi and Mombasa.

 

MR. HUMPHREY K. NDEGWA
Chief Executive
Dalbit Petroleum Limited