March 23 (Bloomberg) -- Total Kenya Ltd. headed for its lowest level in almost a decade amid delays in a plan to improve processing efficiency at the country’s sole refinery in Mombasa.
The stock retreated for a fifth day, declining 7.3 percent to 14.05 shillings by 12:48 p.m. in the Kenyan capital, Nairobi. A close at that level would be the weakest since July 2002.
Kenya Petroleum Refineries Ltd., jointly owned by Essar Energy Plc and the government, has delayed until July a plan to convert the facility into a “merchant refinery,” the country’s Prime Minister, Raila Odinga, said on March 21.
At present, oil marketing companies import crude and the law requires a portion of fuel must be processed at KPRL.
Under the new arrangement, the refinery will source the shipments, refine them, and sell fuel directly to distributors, easing concerns of fuel marketers over processing losses because of operating inefficiencies.
This marks the second delay since January, Eric Musau, a research analyst at Nairobi-based Standard Investment Bank Ltd., said in a phone interview today.
“The postponement is negative because the changes are supposed to bring improvements at the refinery, which is quite inefficient,” Musau said.
In Kenya, Total competes with KenolKobil, a fuel retailer with operations in nine African countries.
Kenya imports all of the crude consumed in East Africa’s largest economy.
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