Consumers protest as petrol prices are increased by Sh9

Apr 18th, 2011 | By | Category: Media Release

The oil industry regulator on Thursday raised fuel prices by Sh9 a litre, touching off protests from consumers and manufacturers.

The Sh8.73 rise is the biggest month-on-month revision since December, last year, when the government started regulating fuel prices to protect consumers from exploitation by oil companies.

Super petrol will retail at a maximum of Sh111.17 in Nairobi and Sh107.92 in Mombasa, up from Sh102.44 and Sh99.19 respectively.

In Kisumu, a litre of Super petrol has gone up to Sh113.42, while it is selling for Sh113.36 in Eldoret and Sh112.25 in Nakuru.

The price of kerosene was reduced by Sh2, in a move aimed at cushioning poor households who use paraffin for cooking and lighting, by reducing the maximum margin from Sh6 to Sh4.

The price controls, billed as the solution to spiralling fuel prices, have failed to bring relief and led to an escalation in the cost by more than Sh15 in the past five months alone.

On Thursday, the Energy Regulatory Commission, which supervises the energy sector and sets the prices every 15th day of the month, attributed the increase to a rise in international prices of crude oil.

“The political instability being experienced in North Africa and parts of the middle east has continued to exert pressure on international oil prices,” said commission director-general Kaburu Mwirichia.

“Other factors influencing a rise in oil and gas prices include recovery from the recent economic crisis in developed countries and increased demand from strong economic growth in some countries such as China and India.”

Manufacturers, who feel the heat as heavy industrial consumers of oil, warned that higher fuel prices would stifle economic growth and lead to another rise in consumer prices.

“We don’t expect to grow an economy with this level of monthly fuel price volatility,” said Ms Betty Maina, the chief executive of the Kenya Association of Manufacturers.

An increase in fuel prices affects the entire spectrum of the supply chain and easily raises inflation as producers and transporters pass the costs to consumers.

Commuting costs are also expected to rise, just a few months after matatu operators raised fares by 40 per cent.

The Consumer Federation of Kenya (Cofek) said the latest increment in petrol prices would “further complicate the lives and livelihoods” of Kenyans.

“It is unheard of for a litre of kerosene to cost Sh92 when Kenya is neither at war nor could be deemed to be a failed state,” said Mr Stephen Njau, the programme officer at Cofek.

Lobby groups and workers unions threatened to call for a boycott of public transport if the government did not rescind the price increases by Monday.

Shortly after the new prices were published, the Consumer Federation of Kenya accused the regulatory commission of colluding with fuel sellers to exploit the public.

The organisation said it would conduct a demonstration to the offices of the President, Prime Minister, and minister for Energy and Parliament next week to protest what it called insensitive price increments.


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