National Oil, Eqwipetrol sign deal to expand fuel distribution
State owned oil marketer National Oil has entered a joint venture with the Eqwipetrol electronic oil exchange platform and Equity Bank in an effort to expand on its mandate.
The move builds on National Oil’s mandate to enhance fuel distribution in undeserved parts of the country.
Eqwipetrol is an electronic based oil marketing platform which is also involved in the supply of petroleum products to areas beyond the scope of traditional fuel operators.
A total of 350 independent oil dealers operating in remote areas have been included in the first phase of the joint venture where National Oil will avail fuel products to the retailers through the Eqwipetrol platform.
Equity Bank will then play a financial role on the enterprise by facilitating transactions via the Equitel mobile-money platform.
Speaking during the signing ceremony for the deal, National Oil chief executive officer MaryJane Mwangi said she expects the new partnership to address some of the challenges prevailing in the country’s fuel distribution channels.
“The challenge has been the retailer getting quality and well-priced products on time and you end up getting an unreliable product due to the existence of a middle man. We want the retailers to come directly to us so that we can enable them to sell fuel at competitive prices,” Ms Mwangi said.
The elimination of brokers and middle men in the distribution channels is expected to foster cost-effective prices for fuel products especially in marginalized regions which have for long been subjected to hiked fuel prices compared to the more accessible markets.
Fuel adulteration is also a matter of concern with the bulk of the adulterated product hitting the underserved markets.
The operation will only manage to reach out to just a fraction of the independent retailers in the country as there are close to 1,200 self-proprietors in the trade.
Eqwipetrol chief executive officer Shiru Mwangi said the service will be opened to more dealers as part of the efforts to bolster the penetration of effective fuel distribution channels.
“It started from zero to the where it is and is ongoing. We will go round the country in the next 3 months to increase our membership. We will hold conversations with independent retailers and inform them of the benefits they stand to get,” she said.
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