{{Rwanda and other countries in the region could soon be plunged into a fuel shortage. This follows a row between the Mombasa oil refinery and marketers that has pushed the facility into a financial crisis.}}
Kenya Petroleum Refineries Ltd (KPRL) last week warned that it could soon be unable to refine petroleum products owing to severe financial constraints, a development that could affect Kenya and its landlocked neighbours including Uganda, Rwanda and Burundi.
Initially, the refinery operated as a contractor. It would process crude oil brought in by marketers.
However, over the years, marketers realised that it was more costly to import crude oil and last year, it turned into a merchant refinery where it would buy the crude oil, process it and sell to marketers.
The financial shortfalls at the refinery were occasioned partly by a dispute between it and the oil marketers over the uplift of refined products.
The refinery said marketers had boycotted its products, hurting operations and stoking a cash flow crisis.
The marketers who argue that inefficiencies at the refinery had made processed oil products more costly than those imported directly have threatened to fully boycott the facility from July, a development that will be watched keenly in Kenya and neighbouring countries that rely on the refinery for petroleum stocks.
Currently, oil companies are lifting only about 65,000 tonnes out of the plant’s monthly refining capacity of 130,000 tonnes of oil products, partly as a result of the inefficiencies and partly of the preference among oil marketers for importing refined oil products.
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