Mudavadi-Jubilee Government is coning Kenyans. Fuel prices not reflection on landing prices.
STATEMENT ON THE RECENT INCREASE OF PETROLEUM PRICES IN KENYA ON 15TH SEPTEMBER, 2021Tap on Stabilization Fund to manage fuel prices.ANC Party is unhappy with the announcement by the Energy & Petroleum Regulatory Authority increasing petroleum prices in the country for the period 15th September – 14th October by nearly Sh8.
The increases in the fuel pump prices will ultimately lead to an increase in the cost of production and transportation for ordinary Kenyans and businesses.What the Ministry of Energy has always done is to pass the increased costs to the mwananchi and business community.
Changes in the computation of the applicable taxation regime have resulted in higher pump prices. In fact, taxes now comprise roughly 60% of the pump price for petrol, diesel and kerosene. It is totally, unacceptable for petrol to retail at 134.72 in Nairobi and kerosene at 110.82 per litre.
This increase is baffling because it is coming at a time when the landed cost of fuel in the country has reduced significantly. It is not a reflection of the international price. Since the recording of the first case of Covid-19 in Kenya in March 2020, Kenyans have been negatively hit and the situation keeps deteriorating. Families around the country are in distress as many bread winners have lost their jobs as businesses continue to shut down. Many Kenyans today do not have a source of income.
It is disheartening that instead of the Government giving Kenyans a soft landing as they struggle to pull through the hard economic times, it has decided to burden them more by increasing the cost of fuel and kerosene. This represents highest price increase to hit Kenyans in over a decade! The Government must understand that this is not the time to push the resilient Kenyans to the edge of the cliff. It is a time to help them navigate through the high cost of living.
Hiking the pump-price only helps to increase inflation that leads to a snowball effect on the cost of food, transport, electricity and manufacturing. The Government should ensure they cushion Kenyans from the high cost of living and normalize making use of the set aside Stabilization Fund as it has been doing in the past couple of months, to keep rates steady regardless of international-oil price fluctuations.
Oil marketers should be compensated from the Fund to help them close the margin gap and quote low prices. Equally, we call for the revision of the formula used in pricing fuel, Review the tax regime on fuel products; a tax equivalent to 100% of pump price is unsustainable, punitive and inflationary to the people of Kenya, Reform the electricity cost structure to include more transparency in the determination of costs/pricing and improve overall efficiency, Review and reform our energy policy, creating a plan anchored on the resources available to the government and leveraging on the creativity and innovation that is abundant within the energy sector.
The high fuel costs will definitely have a negative ripple effect on Kenyans. The situation is dire and should be dealt with as a matter of urgency.
