By Daniel Asher
Consumers have for a longtime been victims of exploitative practices by oil marketers in Kenya and now it is time we say no. It is time to demand for amicable resolution to the current impasse on fuel price inflation and supply short-age. There is every indication that major players in the oil industry have a tendency to influence retail prices by all means, even creating artificial shortages.
The oil marketers act swiftly when the regulator revises fuel prices up-ward, with effects being felt instantly at the pumps across the country and the supply uninterrupted. The upward price revision always takes effect immediately in disregard of whether it is “old stock or “new stock” as dealers quickly move to maximize on their gains.
Scenes of motorist making long queue for fuel products in few stations is out of expectations as the products are promptly made avail-able by all dealers in an effort to maximize on the consumers’ predicament. The latest scenario of fuel short-age, corning just after the downward revision of prices, which has seen many pumps “out of supply” and motorist making long queues at pumps purporting to still hold “old stock” is a clear indication of how the country is held hostage by the obsession of cartels. It shows the extent to which cartels can go to disrupt the supply if only the shortage could result in excess demand and thereby leading to high prices at the pumps with no good intention for the consumers and the country as a whole.
It is public knowledge that Kenya Pipeline Company is currently operating at its full capacity and that oil markets are not placing orders while the few who have are not collecting their fuel.
The concern remains whether the regulator has the requisite institutional capacity to rein in the cartel-like behaviour, where oil companies can hold the country hostage by frustrating the fuel supply.
The main questions are whether the regulator is capable of ensuring a competitive and fair market practices in the oil industry and whether the Regulations are effective in ensuring justice to consumers?
It is time the Government enacted legislation to limit oil marketers in order to protect consumers against the effects of erratic price fluctuations and supply disruptions.
For long-term economic growth, the Government needs to invest more on the efficiency of the refinery process and the piping network to reduce operation and transportation cost.
It is public knowledge that Kenya Pipeline Company is currently operating at its full capacity and that oil markets are not placing orders while the few who have are not collecting theirs.
This investment should also entail more storage capacity at the oil storage facility while upgrading the existing Kenya pipeline network.
The implementation of competition-related regulations in the fuel oil industry should be accorded close coordination to ensure price control, fair trade practices and consumer protection by all agencies.
The Government investment should therefore be aligned to infra-structure that ensures efficiency on the supply chain of petroleum products, instead of relying on oil products price fixation, which only gives short-term relief to consumers
Asher is the Consumer Programme Officer at Consumer Unity and Trust Society, Africa Resource Centre in Nairobi