Kiraitu, Michuki to meet over oil prices

October 20, 2008

, NAIROBI, October 20 – Kenyans will have to wait for two more weeks to enjoy lower fuel and Electricity prices as ordered by President Mwai Kibaki two weeks ago.

Speaking after the Kenyatta Day celebrations at Nyayo stadium on Monday, Energy Minister Kiraitu Murungi said that he was yet to meet his Finance counterpart John Michuki to discuss the review of energy taxes as directed by the President.

“The Minister for Finance has just come back. We will be meeting next week after which we will make a statement,” Kiraitu said as he promised that the prices would ultimately come down.

The Presidential decree came against a background of pleas from manufactures and members of the public suffering under the inflated electricity bills beginning July this year and unrelenting fuel prices. Although global prices have nearly halved, oil companies have only reduced their prices by less than ten percent prompting the government to threaten to invoke price controls.

The Energy Regulatory Commission is working on the legal framework and is expected to make its recommendations but it said last week that this could take months before being fully implemented. Oil marketers in the country have however remained put and insisted on the reduction of the taxes for a substantial reflection of the global trend in the local market.

Mr Michuki has been away in the Untied States for a meeting of the International Monetary Fund for the last two weeks. The tough talking Minister sent a statement from Washington last week ordering oil companies to reduce their prices to reflect the global prices and threatened that he would use ‘all instrument available’ if the companies failed to comply.

In his Kenyatta Day address President Kibaki once again urged the oil dealers to “to extend the benefits of the reduced international crude oil prices to the Kenyan consumers.”

He reiterated that the government was committed to reducing taxes on energy production so as to minimize the effects of the high oil prices on domestic and industrial consumers.  “This situation has impacted negatively on transport and energy costs, and is cutting deeply into household budgets,” he said and added that the government was also developing a comprehensive energy security strategy to ensure that the country had sufficient quantities of affordable energy.

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