Bill seeks to strip EPRA role of setting petrol prices
There are concerns about price volatility, safety, and potential disruptions.
The Energy and Petroleum Regulatory Authority (EPRA) may be stripped of its core function of setting a ceiling of petroleum products prices if MPs pass a Bill currently under consideration.
The draft Energy (Amendment) Bill, 2024 by Kesses MP Julius Rutto seeks to amend section 10 of the Energy Act of 2019 in order to strip off Epra the function and let petrol prices determined by International markets and other factors.
“The principal object of this Bill is to amend the Energy Act of 2019 to remove the function of setting the ceiling of petroleum products prices from the Energy and Petroleum Regulatory authority,” reads the Bill.
The effect of this is that the prices of these products shall be determined by the international market prices and other factor.
The Bill seeks to delete paragraph (a) sub-paragraph (ii) which provides for the function of regulating the importation, refining, exportation, transportation, storage and sale of petroleum and products with the exception of crude oil from Epra.
Section 10 of the principal Act that the Bill seeks to amend mandates Epra to regulate importation, refining, exportation, transportation, storage and sale of petroleum products with the exception of crude oil.
In April last year, the country began undertaking importation of petroleum products through the Government-to-Government arrangement which was slated to run for nine months but has since been extended to December this year.
If MPs pass the Bill affecting the amendments, it will not only remove the function of regulating the sale of petroleum and petroleum products from Epra but will also take away its role in regulating other aspects such as importation, exportation, transportation and storage of petroleum products.
The draft Bill is, however, silent on how the importation of, exportation, transportation and storage of petroleum products will be regulated.
According to the Parliamentary Budget Office (PBO), enactment of the Bill will save taxpayers Sh169, 478,400 which mainly includes operational expenses of the directorate that normally conducts the price review, staff remuneration, and maintenance costs.
The office in its analysis of the Bill presented before the Budget and Appropriation committee says if the Bill is enacted into law, it will result in price liberalisation and promotion of competition among the oil marketing companies, a move which will make prices of petroleum products cheaper for consumers.
It, however, warned of price spikes due to price vitality, quality and safety concerns of the petroleum products, potential shortages and likelihood of disruption of petroleum products, a move which will affect small players in the industry.
The Bill will however only proceed to publication and formal introduction for first reading in the House afterthe budget and appropriation committee takes account the views of Treasury Cabinet Secretary
The committee is expected to submit its report on the proposal within 30 days.
