BUSINESS

KCB Pumps Ksh120 Billion To Support Oil Marketing Firms In Petroleum Imports

Share
KCB Bank
[Photo/ Courtesy]
Share

KCB Bank Kenya has injected over Ksh120 billion to support Oil Marketing Companies (OMCs) importing fuel as it seeks to consolidate its support to the energy sector.

The Bank has been facilitating oil importation into the country by financing the oil firms under its portfolio that have won business under the Open Tender System (OTS) through the Ministry of Petroleum and Mining.

This gives the OMCs a strongroom to import refined white oils from multinational oil suppliers for distribution across in Kenya and the wider East African region. The tenders financed include the importation of JET A-1(Jet Fuel), PMS (Petrol) and AGO (diesel) products.

“KCB is a champion of regional trade, extending its services across the border of East Africa and beyond as a catalyst of the energy sector. We are working with the oil marketers to better support them to compete in the global petroleum market,” KCB Group CEO Paul Russo said.

Under the OTS system, the winning oil marketer imports the fuels on behalf of the other firms using the confirmed allocations; the other oil marketers are mandated to offtake their volumes upon arrival.

With the government indicating doing away with oil subsidies, the price of fuel in the country is set to surge in the coming months. Therefore, KCB’s contribution towards the stabilization of the prices in the short term will be vital.

The centrality of energy in the economy has been identified as a key driver of the development agenda with ripple effect in all sectors of the economy.

Since 2005, Kenya has been importing refined petroleum products through the Open Tender System — whereby the winning bidder solely imports the petroleum products and delivers them to the port of Mombasa, where other oil marketers buy from the importer.

Importation of petroleum products through the OTS allows the oil marketing companies to access petroleum products at the same price and therefore levels competition in the petroleum market.

OTS is run through monthly tenders and entails sourcing of petroleum predominantly from the spot market, whereby petroleum is sourced from the open market without any prior contracts. The industry recognizes that OTS is an effective supply system that creates a competitive and transparent means of availing the product to Kenyans through economies of scale.

KCB facilitates local and cross-border trading through operations and liquidity financing, as well as mitigating risks inherent in trade.

Read: KCB Gets Ksh18B IFC Loan For Green Lending

>>> KCB Eats Equity’s Lunch in DRC With Ksh15B Deal

Written by
BT Reporter -

editor [at] businesstoday.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow Us

Related Articles
BUSINESS

Kenya Airways Announces Direct Flights Between Nairobi and Gatwick

Kenya Airways (KQ) will from July 2025 start operating direct flights to...

LEJA APP Download
BUSINESSSMART MONEY

Kenyan Fintech Leja Processes Ksh250B in Business Transactions

Kenyan fintech startup Leja has achieved remarkable growth, processing $2 billion (about...

Absa bank top talent
BUSINESSCAREERS

Absa Bank Star Performers Shine in a Competitive Industry

Absa Bank had its Managing Director and CEO, Mr Abdi Mohamed, recognized...

Ibrahim Ambwere wealth
BUSINESS

How Luhya Tycoon Stopped StanChart Bank From Closing Kakamega Branch

When Standard Chartered Bank mapped out branches to close down some six...