Kenya to privatise Nock’s fuel stations

The government of Kenya has announced plans to privatize National Oil Corporation of Kenya (Nock)’s fuel stations.

The move is a restructuring plan that aims at help the firm solve the financial crisis its facing. The company has faced financial issues, as evidenced by audit queries raised by the Auditor-General. These include inaccuracies in financial records, undeclared allowances, and failure to meet strategic stock requirements.

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Privatization plan

Under the plan, the company will be split into three subsidiaries under a holding company, each focusing on different aspects of the petroleum supply chain.The first subsidiary; NOC Upstream Limited, will handle exploration and upstream production activities. The second, NOC Trading Limited, will manage the midstream operations, including holding strategic stocks of petroleum products for import and export. The third, NOC Downstream Limited, will focus on marketing and distributing petroleum products.

The private sectors will take over the over the management of the downstream subsidiary, which controls the fuel stations. Investor will be a licensed oil marketer, locally or internationally. The investor’s role will include injecting working capital, improving branding, and making the subsidiary profitable.

The private investor will however not own shares in the company but instead the profits will be shared from the fuel stations’ entity. The government will also retain strategic assets through two of the newly created subsidiaries. These strategic assets likely include aspects critical for national energy security.