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Kenya: Let's Seek Cheap Oil From Sudan
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The Nation (Nairobi)
OPINION
18 July 2008
Posted to the web 17 July 2008
Abu Ayman
Before signing the comprehensive Peace Agreement between the then rebel Sudanese People's Liberation Army and the Sudan government in 2005, proposals emerged for Kenya to acquire cheaper oil from Sudan.
Under Comesa, to which the two countries belong, trade within the region is not subject to tariffs, which means that Sudanese oil is a cheaper alternative.
This proposal, however, met stiff resistance from church and human rights groups which accused the Khartoum government of perpetrating human rights abuse in the South.
Perhaps as a result of these pressures, our Government failed to pursue this option. Kenya is now facing record high prices which have impacted negatively on the cost of living.
The prices of food and basic commodities, transportation costs, electricity and other services continue to rise unabated as a result of the spiralling fuel prices.
During the budget speech, Kenyans pegged their hopes on former Finance minister Amos Kimunya cushioning them from the high fuel prices but to the disappointment of many, he didn't. The high cost of fuel may contribute to further increases on the rate of inflation which grew to a record 31.5 per cent in May - the highest since the early 1990s.
Buoyed by the high global prices now costing US$ 140 a barrel, pump prices are expected to jump to Sh110 in coming weeks.
Due to this, it is high time that the Sudanese option was explored to save Kenyans from the increasing cost of living. The conditions which led to this option being rejected are now obsolete as the Khartoum government and the former rebels are now working together.
The governmenmt should take advantage of its Comesa membership to procure oil at affordable prices. While Kenyans continue to suffer from the high fuel costs, proposals made to reverse this trend have not been tried.
Last a year, a proposal was mooted to build a railway line linking Juba with Kenya. The $4.16 billion project was expected to be used by the Southern Sudan government to ship up to 70,000 barrels of oil a day to Kenya.
However, since the German railway company - Thormaehlen Schweisstechnik AG - signed an agreement with the SPLM, the Kenya and Uganda governments to build the railway line in 2004, there has been no progress.
Two years ago, Kenya signed a bilateral agreement with Venezuela that would allow the procurement of crude oil at lower prices.
Early this year, Energy minister Kiraitu Murungi added his voice to the pact, saying the Government would buy petroleum products from Venezuela to stop multinational oil companies exploiting consumers.
Kenya signed a Memorandum of Understanding with Tamoil Africa Holdings Ltd of Libya in the beginning of the year, ensuring that Libyans provide Kenya with petroleum products at concessional rates.
At the end of his official visit to Libya, President Kibaki said the concessional rates would cushion Kenyans from the prohibitive fuel costs. But we are yet to enjoy the fruits of these agreements.
The high fuel prices are eating into the purchasing power of consumers who are already suffering from the high cost of food. The Government has the responsibility of seeking options which relieve ordinary Kenyans from this situation.
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Mr Ayman is the editor of 'Friday Bulletin', Jamia Mosque, Nairobi.
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