Fuel price increase draws MPs’ anger

petrol station

A petrol station in Nakuru with adjusted fuel prices yesterday. The city, once the headquarters of the Rift Valley province, witnessed low traffic on September 15, 2023.

Photo credit: Boniface Mwangi | Nation Media Group

MPs have expressed anger with the increase in fuel prices and demanded to be told why a government-to-government oil deal President William Ruto’s administration signed with three foreign firms has not registered gains to consumers.

The National Assembly Energy Committee said Kenyans have suffered enough. The price of petrol has shot up by Sh17, diesel Sh21 and kerosene by Sh33.

The lawmakers spoke at a meeting with Energy CS Davis Chirchir, Kenya Power boss Joseph Siror and Energy Petroleum and Regulatory Authority chief Daniel Kiptoo.

If the agreement cannot lead to a reduction of fuel prices, it should be abandoned and subsidies re-introduced, the MPs said.

“It is astonishing.  People are just quiet as if nothing is happening,” committee chairman Vincent Musyoka said.

“Have we reached the level of not having any feelings for ordinary Kenyans? Why have prices changed by such a huge margin? We demand the truth.”

Awendo MP, Walter Owino, said Kenyans were informed that the government-to-government deal would address the problem of constant price increases.

“When the government-to-government deal was signed, the Cabinet Secretary said fuel prices would reduce and the shilling would gain against the dollar but the opposite is what we are experiencing,” Mr Owino said.

Embakasi South MP, Julius Mawathe, said the government is driving many Kenyans out of business and jobs.

“You are killing Kenyans. Many people will lose jobs because of the cost of fuel. The boda boda cannot afford fuel, meaning he will not go to work,” Mr Mawathe said.

Embakasi East MP, Babu Owino, said the government-to-government deal needs to be abandoned immediately and the energy business made competitive. He added that the deal only benefits few people

The MP said the opposition team should also walk out of the ongoing bipartisan talks since lowering the cost of living is part of the agenda.

Nyatike MP, Tom Odege, called for a return of subsidies.

On assuming office, Dr Ruto changed the procurement policy from open tender in favour of government-to-government.

The Kenya Kwanza administration settled on three foreign firms to supply petroleum products to Kenya – Amarco, Abu Dhabi National Oil Corporation Global Trading and National Oil Company.

Mr Chirchir defended the deal on September 15, 2023, saying Kenya now gets fuel at reduced prices.

“The government-to-government agreement is working. It has eased pressure on the shilling with a reduction in depreciation against the dollar,” he said.

Mr Chirchir added that he is holding talks with the Treasury to reintroduce a stabilisation fund that will cushion Kenyans against high prices.

He said the Sh5.4 billion in the account was depleted at the end of the last financial year and another Sh29 million that was provided in the supplementary budget was used to pay oil marketers.

He did not say when the stabilising fund would be made available but gave a projection of three months.