BY STEPHEN MUTORO, COFEK
The latest fuel prices announced by the Energy Regulation Commission is a welcome but inadequate relief to consumers. With a relatively strong shilling and lower prices of international crude oil, consumers had expected super petrol to drop by at least Sh15 and Sh10 each for diesel and kerosene in Nairobi.
The actual drop was by far below reasonable expectations of the Kenyan consumer. It is on this strength that we must re-emphasise our position as follows; The suspect ERC forecast of the fuel pricing last week was meant to hoodwink the public into accepting what has been offered.
If it must continue giving price caps, then ERC must stop its speculative forecasting as its detrimental both to the market and consumers as it will dstort the forces of supply and demand. In assessing the fuel pricing caps, it is apparent ERC is asking the consumer to foot the bill for sector gross inefficiencies and even corruption. This must stop. Again the ERC must be addressing the twin aspects in the monthly price caps.
National Oil Corporation must more than ever show practical value for taxpayers investment by selling far below the ERC price caps in order to stabilize the prices and induce competitiveness in the petroleum sub-sector. The request by the Kenya Petroleum Refineries Ltd to ERC over the profit protection on transition from tolling to merchant crude oil processing must be declined. We urge Parliament to take advantage of the pending Finance Bill 2011 to condemn and reverse the proposal by Finance Minister and Central Bank Governor, to the IMF, on withdrawal of subsidies on fuel.
Cofek will work with like-minded organizations to mobilize Kenyans to resist the new proposal to IMF if the Finance Minister does not rescind it within the next four weeks. We demand that the Finance Minister to appoint the board of Competition Authority to offer oversight on the current excesses by the ERC and other regulators.
After making the Competition Act, Cap 504 effective on August 1, 2011 the Finance Minister has either forgotten or is not in a hurry to fully implement the legislation which would offer immediate reprieve to consumers. Unless manufacturers and suppliers of goods and services immediately lower the cost of their products and services, the recent lowering of fuel prices will neither have any meaning nor impact on the cost of living.
It is for this reason that consumers expect manufacturers and matatu operators, who are quick to adjust their prices whenever fuel prices go up, to end their silence and say by what margin the cost of foodstuff and commuting will be lowered and by when.
Meanwhile, our High Court Petition No.88 of 2011 on the high cost of living comes up next week (on 20th January 2011) and we do look forward to Judiciary’s directions on how the government may be compelled to cushion consumers from the prevalent high cost of living.
Stephen Mutoro is the Secretary General of Consumers Federation of Kenya (COFEK)
