Rubis bags second Sh1.8bn KPLC fuel contract
A Rubis station in Nairobi city centre on Saturday, July 1, 2023.
What you need to know:
- The contract, which was awarded last month, comes after Rubis also won another Sh1.73 billion tender from the utility in March for diesel supply to the dozens of off-grid stations.
- Kenya Power regularly advertises lucrative tenders for the supply of fuel to its 30 off-grid stations that serve millions of customers in areas that are not connected to the national grid.
Rubis Energy Kenya Limited has won a Sh1.83 billion contract from Kenya Power to supply diesel to the utility’s off-grid power stations, according to data from the Public Procurement Regulatory Authority (PPRA).
The contract, which was awarded last month, comes after Rubis also won another Sh1.73 billion tender from the utility in March for diesel supply to the dozens of off-grid stations.
Kenya Power regularly advertises lucrative tenders for the supply of fuel to its 30 off-grid stations that serve millions of customers in areas that are not connected to the national grid.
Most of the stations are located in Turkana, Marsabit, Wajir, Mandera, Isiolo, Garissa, Baringo, and Samburu.
The 30 stations consume about 2.586 million liters of diesel per month on average according to data from Kenya Power, making the tenders big business for oil marketing companies.
Because these customers cannot afford the cost of this expensive diesel-generated electricity on their own, all power consumers in the country help offset this cost through the fuel energy charge, which is the single second costliest component of power bills.
The component is adjusted monthly to cater to changes in fuel prices and also covers costs for diesel used by thermal power generators that supply power to the grid.
In December last year, Kenya Power revealed it would spend Sh5.21 billion (€33 million) to retrofit 18 of its diesel-powered off-grid stations with solar to lower costs.
The project will be funded by the Agence Française de Développement (AFD).
Rubis is the third largest oil marketing company in Kenya by market size with a share of 10.02 percent, according to data from the Energy and Petroleum Regulatory Authority (Epra).
Vivo Energy Kenya is the largest, which is the distributor of Shell-branded products in the country, and is the largest OMC in Kenya.
In the financial year 2021/22, Vivo had a market share of 23.83 percent, according to Epra data.
Total Energies is the second largest OMC in the country with a market share of 17.3 percent while Ola Energy is the fourth largest with a share of 6.82 percent.
