Oil marketing firm KenolKobil, is set to construct a 200-tonne liquefied petroleum refilling plant in Kenya. The plant that will be constructed in Kisumu is expected to help the company cut on its transportation costs.
KenolKobil Managing Director, Mr. David Ohana confirmed the news and said that the company is also focusing on profitable businesses.
“We are focusing on businesses with high yields as we consolidate operations,” Mr Ohana pointed out.
The LPG construction is among many other areas the firm is looking to cash in, others are lubricants, non-fuel activities, aviation, export and the retail business; this is according to Mr. Ohana. However, the firm is not very keen on the trading business such as the open tender system (OTS), the country’s central fuel supplies purchase system operated by the Ministry of Energy and Petroleum.
Last year, the oil firm signed a deal with BP that granted it a ten-year distributorship license for the Castrol-branded lubricants.
According to reports, consumption of LPG is still low in Kenya with industry estimates showing that the country lags behind. The average consumption levels of cooking gas in the Sub-Saharan Africa region is at an average of 2kgs per capita. The low uptake is attributed to the high initial cost of acquiring the equipment as well as inadequate storage facilities for the product.
“The LPG market is not growing as we thought. There are challenges on the storage infrastructure and we also feel that the LPG exchange pool is not working efficiently as it is encouraging illegal refilling,” said Mr. Ohana.
The KenolKobil Group is Africa’s fastest growing indigenous oil marketing conglomerate with an expansive investment portfolio spanning the entire Eastern, Central and Southern parts of the African continent. The Group consists of subsidiaries in eight African countries outside Kenya (Head Office) including; Uganda, Tanzania, Rwanda, Zambia, Ethiopia, Burundi, Mozambique and Congo DR.
