Petrol Economics

[Ngimanene na Muchere]

Vile naelewa, the state imports petroleum and stores it kwa KPC where the OMC go purchasing it for distribution.

Swali ni, does the state also import the specialized fuels kama V Power, Total Excellium, hii ya Rubis or where does that fuel come from? NOCK seem to have kawaida petrol haina madoido.

The monthly price reviews. KPC walisema they're very very wet with hundreds of millions of petroleum litres that can last till June/July. Meaning they purchased the fuel at price X, why then is there a monthly price review for something they aren't purchasing a fresh, shouldn't they sell at X+n to the OMC?

Rubis wamesema CEO alienda France to explain to HQ. Gavament inasema they deported him. Who is carrying who baby dogomothi?

 

[zapp_brannigan]

specialized fuels kama V Power, Total Excellium, hii ya Rubis or where does that fuel come fro

The only special thing about excellium,ultratec, O'ptimium is perfomance additive that is added at the time of loading fuel kwa thermos .Total sell the additive in some cans incase you feel like what they have in the fuel is not enough .You can also check Xado who stock fuel additives.
Edit : Vpower is imported by Vivo (2018)

 

[Kdawg254]

I think OMCs are the ones which import the oil.
Also Vpower,if am not wrong,is shipped as is on its own.The rest am not sure.

 

[shocks]

the state imports petroleum

State does not import, ministry organises industry players to build up the order book, then a lowest bidder brings in the cargo. so the country can enjoy economies of scale. The winning bid brings in a cargo then the individual companies go collect their quantities in Mombasa or at kenya pipeline

Meaning they purchased the fuel at price X, why then is there a monthly price review for something they aren't purchasing a fresh, shouldn't they sell at X+n to the OMC?

The process explained above occurs several times in a month, each cargo comes in at a different price (winning bid). Price is therefore adjusted according the weighted average cargo costs. Now why they chose a monthly cycle to adjust prices sijui

 

[zapp_brannigan]

which import the crude

We import final product no further processing happens in the country.

 

[mkurugenzi]

State does not import, ministry organises industry players to build up the order book, then a lowest bidder brings in the cargo. so the country can enjoy economies of scale. The winning bid brings in a cargo then the individual companies go collect their quantities in Mombasa or at kenya pipeline


The process explained above occurs several times in a month, each cargo comes in at a different price (winning bid). Price is therefore adjusted according the weighted average cargo costs. Now why they chose a monthly cycle to adjust prices sijui

This is #THE_TRUTH. Well done.

 

[Kdawg254]

We import final product no further processing happens in the country.

Sorry meant oil.But it’s been well explained hapo juu.

 

[Clemens]

Max Weber in his bureaucracy theory noted that bureaucracy type of leadership leads to inefficiencies. There are decisions made at the policy level, that usually baffles the field officer, since they don't make sense in the field.
A small fable to explain his(Max Weber) point.

There was once a military outpost where two sentry's were posted round the clock to a cement slab, everyone assumed that there was something very important buried under it, until a New commander while reviewing postings, wondered why?,
He referred to the handing over report, and saw that there was no mention of its importance. He therefore called his predecessor, who duly informed him that he also had found that to be the practice in the outpost.
After reviewing the duty rosters for a decade they found out the genesis of the posting to be a good 11years ago when the post had been opened.
He found the contact information for the then outpost Commander who had retired 3 years before, the commander informed him that; he had posted sentry's on the same slab, since it had been destroyed twice by unknown and was transferred a day after making the duty roster and assumed that it was something too mudane to include in his handing over report, since logic can be applied. The subsequent Commanders never questioned the posting and it became the part of the outpost permanent duty posting.


If you would ask about the rationale behind the monthly reviews, the answer might surprise you or it might not, and we are overthinking.

 

[mzeiya]

 

[Clemens]

Tragedy of the commons.

 

[The.Black.Templar]

Ni Easter Holz na hamna ngata? That press conference was done yesterday ndio your overlords wakule sherehe bila kusumbuliwa, wao wako na ngata

 

[Ngimanene na Muchere]

The only special thing about excellium,ultratec, O'ptimium is perfomance additive that is added at the time of loading fuel kwa thermos .Total sell the additive in some cans incase you feel like what they have in the fuel is not enough .You can also check Xado who stock fuel additives.
Edit : Vpower is imported by Vivo (2018)

So they import kawaida fuels, OCM add additives baadaye? And for the small marketers? Also ministry says they'll punish 10 OCM which should be the big boys kina shell. How feasible is it to have Shell with reduced petrol?

 

[Aviator]

The monthly price reviews. KPC walisema they're very very wet with hundreds of millions of petroleum litres that can last till June/July. Meaning they purchased the fuel at price X, why then is there a monthly price review for something they aren't purchasing a fresh, shouldn't they sell at X+n to the OMC?

Would you prefer they review daily? How practical is that?
Remember they are still buying more to replenish the stocks so the adjustment is just a reflection of the weighted average cost of fuel purchased over the period.
To me, the pricing formula makes sense.

Swali ni, does the state also import the specialized fuels kama V Power, Total Excellium, hii ya Rubis or where does that fuel come from? NOCK seem to have kawaida petrol haina madoido.

State doesn't import fuel. OMCs do. And they import a finished product.

 

[zapp_brannigan]

So they import kawaida fuels, OCM add additives baadaye? And for the small marketers?

Yes it's kawaida fuel .Small marketers haongezi anything .
Think rice ya kawaida Vs pilau .

 

[Ngimanene na Muchere]

And the so called punishment of the big boys given they're still the largest players in the industry? How feasible is that?

 

[kijanamrefu]

the pricing formula makes sense.

To me, if they arrive at a price based on the lowest bidder as @shocks says, then it quite easy to always control the price because an agreement only has to be reached among a few marketers, no? So it ends up being a legitimised cartel.

 

[shocks]

So it ends up being a legitimised cartel.

It is. The conditions and hoops you have to jump thru just to participate in that oil importation tender huwa wazimu

 

[Aviator]

To me, if they arrive at a price based on the lowest bidder as @shocks says, then it quite easy to always control the price because an agreement only has to be reached among a few marketers, no? So it ends up being a legitimised cartel.

That is how it is.
And that's what they are.