PM: Oil companies could lower prices

August 13, 2008

, NAIROBI, August 13 – Prime Minister Raila Odinga has put oil marketers on the spot for failing to lower fuel prices, despite tax benefits extended to them by the government.

Terming the high oil prices in the country, which have resulted into an inflated cost of living as “a national crisis”, Odinga called on the industry to change the trend.

“We are not interested in you announcing huge profits while the masses are suffering due to the high prices of your products,” he stated.

The PM cited the zero rating of Liquid Petroleum Gas (LPG) in this year’s budget, and was emphatic that oil companies had to be more conscious of the consumers’ plight.

Speaking at a luncheon hosted by the Petroleum Institute of East Africa (PIEA), Odinga  called on the industry to initiate dialogue on how best these benefits could be passed on to consumers.

Insisting that the private sector and the government were partners, the Prime Minister said they both had a responsibility to cushion the public from vagaries of the international market, which were beyond anyone’s control.

He further asked the industry to increase investment in alternative energy as a way of mitigating on dependence on crude oil.

“I’m shocked that the private sector only accounts for 12 percent of investment in the energy sector,” Odinga lamented.

“Even the oil shock of the 1970s did not dramatically change the course of how we organise our societies. Let’s stop hiding behind the curtain of supply and demand; people will not come to invest in Kenya unless we create the capacity for them to do so.”

Odinga noted that the energy sector was at the heart of Vision 2030 and all the country’s national goals depended on it.

“Energy is in fact one of our greatest bottlenecks, with grossly inadequate supply for the current demand, leave alone for the business growth we plan,” he stated.

Reacting to the Prime Minister remarks, PIEA chairperson Patrick Obath called on the government to create a more conducive environment to stimulate greater private investment in the sector.

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