Energy crisis will not disappear by magic


The statement by Energy PS Patrick Nyoike on “causes of the currently very high petroleum fuel prices” made a very good reading on long term pledges but fell on its head on addressing salient local issues that have led to an uproar by Kenyans, outside and inside parliament, over extreme fuel prices.

From the outset, Mr Nyoike must be commended for responding to public outcry albeit reactively.

His assertion that the “unprecedented high petroleum pump prices witnessed in the country have been caused (purely) by factors beyond Kenya’s control”, while in part remains valid, is largely insulting to the intelligence of an average Kenyan consumer.

What in essence the PS was implying then was that his ministry has no business existing. Because if it did, the ministry would certainly have a role in taking oil prices either the north or south of the fuel pricing – whether or not external factors play out in either direction.

If Mr Nyoike was in the country on Tuesday afternoon during a heated and televised parliamentary debate on the subject matter, he should have noticed that his own Minister Mr Kiraitu Murungi admitted to corruption and other challenges in his own ministry and which allegations the minister confirmed he was “dealing with” and will not “run away from”.

For Mr Nyoike, therefore, to negate this fact that it is within the public domain, one is sure to conclude and rightly so that Mr Nyoike was either contradicting Mr Murungi or was being unnecessarily defensive.

When he talks of  “… the government has proposed additional measures to cushion Kenyan consumers from negative effect of high petroleum pump prices through reduction of excise duty by 30% and 20% on kerosene and diesel” what exactly does he mean by the word “government”?

More fundamentally and if his ministry were serious on consumer protection, it would have been the one consulting with consumers and routinely making those proposals way before the current public outcry.

Needless to mention, almost a week after the “reduction” of excise duty, pump prices are intact! No one knows who between the Kenya Revenue Authority and Energy Regulatory Commission is supposed to effect the new pricing and just when.

In a nutshell, Mr Nyoike’s press release was long on excuses.

Firstly, if the long term measures outlined by the PS were communicated to consumers in January with a matrix of counter-actions, we would certainly not be where we are today.

Secondly, the ministry deliberately swept under the carpet the “local issues” that have combined with the external factors – such as the Northern Africa and Arab world crisis and the weakening shilling against hard currencies – to drive the “very high petroleum fuel prices,” the PS acknowledges.

Such issues include but are not limited to heavy and unfixed taxation levels, gross inefficiency, a compromised and muted regulator in addition to thriving corruption especially on the unresolved Sh7.8 B “Triton Scandal” on which Kenya Anti Corruption Commission has been fairly slow to act.

Such corruption could be extended to one-sided constitution of sector parastatal boards of directors with no consumer representation, and worse still revealing severe regional imbalances.

Socio-economic and even political circumstances in 2008 and now are drastically different. Indeed it is mischief, if not plainly pedestrian ideology, for one to say that without price controls, oil marketers would have retailed at Sh121 instead of Sh111.

Mr Nyoike’s economic advisors should have advised them that price controls even on the short term “success” has long term negative and costly ripple effect. It is unsustainable as it often strangles the all-important sector competitiveness such as witnessed in the telecommunications sector.

Some of the infrastructure proposals are as interesting as they are mentioned. The “additional jetty at Kipevu” needed more expounding given that the Gwassi MP Mr John Mbadi said in Parliament this week that the two “principals” were “made to commission a non-existent project”.

The energy sector competitiveness will never sneak in by accident. It must be rolled out with a well thought out strategy dressed in sufficient political goodwill. It must then be executed to the letter. Short of this, the rest will be mere rhetoric and pipedreams.

Stephen Mutoro is the Secretary General, Consumers Federation of Kenya (Cofek).

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