State should curb rising fuel prices in Kenya

Business Daily Africa, April 20, 2011

By Daniel Asher

The increase in fuel prices is not acceptable under the current economic situation where consumers are already grappling with the effects of high basic food prices in the country.

With many consumers already locked out of basic industrial goods and services including transport to their working places as a result of sky rocketing fuel prices in the country, the reluctance by the government to intervene is quite depressing.

The situation is a real threat to the life of millions of families living below the poverty line in rural and informal urban settlements as the impact of the increasing fuel prices is replicated in almost all basic consumer goods and services.

The pricing formulation on fuel products have only worked to enrich the dealers with no consideration to the plight of consumer who are already faced with high food prices at the face of a record inflation rate of 9.2 percent and meagre wages.

It appears like our government is on leave or is absconding on its responsibility to protect its citizens even as the basic commodity prices go beyond capability of majority of citizen.

With the situation affecting almost all the sectors of the economy, laxity by government to act is a recipe for economic turmoil.

The government needs to shift its focus from blaming the international prices hike and the crisis in the Arab world to immediate robust and objective action within the energy sector to bring to an end the disaster resulting from the inflation on fuel prices.


The Ministry of Energy and the energy regulatory commission should be back on track with drastic and sound measures including consumer friendly fuel price formulations, eliminating the cartel like behaviours of setting own prices by dealers in the industry to rescue consumers from the effects of market inflation arising from uncontrolled fuel prices in the country.

The Energy Regulatory Commission must heed to the cry of consumers, refocus on its role in the sector and be above board in regards to regulatory capture by taking into consideration the interest of all stakeholders more so the marginalised consumers in the fuel pricing.

The Finance ministry needs to wake up to the reality and make timely bold measures to reduce the fuel costs at the pumps while increasing the supply through considerable adjustments or complete waiver on all taxes imposed on oil fuels and mitigating the cost associated with inefficiencies in refining and general provision of petroleum products in Kenya through subsidies.

The government through its anti competition agency and the line institutions needs to work jointly in curtailing the anti-competitive behaviours among the oil fuel dealers to stop the burden from being passed on to the consumers at the pumps.

Mr. Asher is the Programme Officer, Consumer unity and Trust Society (CUTS- Africa Resource Centre, Nairobi).

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