Workers at east Africa’s only oil refinery on Kenya’s Indian Ocean coast protested on Wednesday and blocked the entrance to the plant over reports the facility may be closed.
More than 500 workers and contractors at the Kenya Petroleum Refinery Ltd (KPRL) were joined by residents of the area to press the government to release a report on the facility’s viability that was due to be completed by end of May.
“Currently we are operating with a lot of problems because workers are out protesting against an alleged intention to close the refinery,” KPRL Managing Director Brij Mohan Bansal, told Reuters by phone, urging the workers to return to work.
This was the second such protest after the workers demonstrated last week.
“We are not going back to work until we receive assurance from the government that this plant will not be closed,” said Raphael Olala, the coast branch secretary of the Kenya Petroleum Oil Workers Union.
“The government is taking the refinery issue for granted, not knowing the consequences of what a shutdown could do to the economy,” he added.
The refinery is run by India’s Essar Energy, which co-owns it with the Kenyan government.
Fuel distributors have long complained about the quality of products from the 50-year-old refinery in the port city of Mombasa and want it closed so they can buy cheaper and better imports from refineries of their choice. Under Kenyan law, they are obliged to buy fuel from the refinery.
Bansal said the refinery typically refines 4,500 tonnes of crude per day (about 32,000 barrels per day), but that this had fallen to 2,500 or less due to reduced buying by oil marketers.
“We are not able to recover the costs of production,” he said.
Essar has said it wants to raise $1.2 billion for a substantial overhaul of the plant. But the Energy Regulatory Commission (ERC) has said the refinery could be converted for a different use, including into a storage facility, if the proposed upgrade turns out to be too costly.
The refinery’s managing director said in April after its upgrade and expansion, the refinery would have a crude handling capacity to 4 million tonnes of crude per year (79,000 bpd) by 2018 from 1.6 million now.