Ng'ang'a Mbugua
2 November 2008
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Nairobi — Fuel consumers in Kenya should eat more carrots to boost their sense of sight. It is only in this way that they will be able to see for themselves the gross economic crimes that have been committed by oil companies in the recent past.
Although the price of crude oil has declined by half over the past four months, oil companies in Kenya continue to rob their customers by charging more than Sh100 for a litre of petrol and more than Sh83 for a litre of kerosene.
Even the Government-owned National Oil Corporation has not done better. In some instances, it has been selling its fuel at a price higher than the multinationals, yet one of the reasons it was set up was to regulate the market by charging lower than the robber barons of the oil industry.
For months on end, fuel consumers were left in agony as President Kibaki, Energy minister Kiraitu Murungi and other leaders pleaded with the oil firms to reduce fuel prices, which were also pushing up the cost of electricity.
That the two leaders were pleading was baffling since one of the jobs of government is to compel compliance with its regulations.
Curious as the pleas were, the fuel companies turned a deaf ear to them until last week when Mr Murungi threatened to reintroduce price controls as one way of checking the unchecked appetite for profit that has characterised oil companies.
From their swift reaction, it would appear that the firms only understand the language of force.
And, much as I have in the past been opposed to price controls, I have eaten some carrots too and now I have seen the light.
Even in America, President Bush has been severely reprimanded for allowing deregulation, which has now been squarely blamed for the collapse of the US money markets.
Before Mr Murungi threatened to cut fuel prices, oil companies had learnt a trick or two to fool their customers.
On Limuru Road, for instance, they had put the price of diesel above that of petrol on the billboards, creating the illusion that prices had been reduced, since diesel is cheaper than petrol.
In the Nairobi Central Business District, they were even more brazen, using faint blue colours for the price of petrol and a bold red for the price of diesel.
Some stations had even designed fast-moving neon lights that made it difficult for their customers to know how much they were actually paying for petrol.
Their ruse was quickly discovered and only people who do not eat carrots were fooled by the neon lights.
By an extremely happy coincidence, the stocks that the oil companies had bought cheaply some time back arrived in time to make nonsense of Mr Murungi's threat.
But the kind gesture, which was meant to hoodwink people into believing that Christmas had come early, fell short by about Sh3, according to the minister's expectations and Sh10 short of my expectations.
The only reason I expected a bigger drop was that a barrel of crude now costs about $78 (Sh6,084) per barrel which is about half the June prices.
Barely a day after the prices dropped, Finance minister John Michuki announced that he had reduced Value Added Tax on oil products from 16 per cent to 12 per cent.
No doubt, Mr Michuki's move was the most decisive step taken so far to help the great majority from the pinch of fuel prices.
And if his order is implemented, not only will the cost of kerosene and other fuels drop, but so too should the cost of electricity.
In the recent past, the amount consumers have had to pay for "fuel cost adjustment" has been so high as to make electricity a luxury. So bad had the situation become that manufacturers were threatening to close their businesses and sack their employees to make ends meet.
Despite this reprieve, which makes me recommend Mr Michuki to be appointed the Third Principal, the Government must go ahead with its price control measures.
Judging from the events of recent months, the private companies have failed to ensure that market forces dictate prices and they have abdicated their responsibility.
Price controls may sound draconian and could as well be, but the point here is that if private companies cannot operate on the simple laws of supply and demand, then they have no business setting prices even in a free market economy.
And once we are done with fuel, the next frontier of price control will be food prices. It is only logical.
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Why Obama must remain vigilant
On Tuesday, voters in the US of A will be going to elect their president.
All indications are that Democrat Barack Obama is poised be the man who will become the 44th tenant of the White House, and for the first time in history, he could paint the White House black.
As the US ambassador to Kenya, Mr Michael Ranneberger would say, America is "on the verge of a generational change".
If everything remains constant, there is nothing to stop Senator Obama from winning. But America has demonstrated before that it is not a perfect democracy.
And as happened in 2000, it is possible for a candidate to win the popular vote and still not ascend to the most powerful office in the US.
It was not lost on observers that about 10 days ago, Mr Obama's popularity ratings dropped significantly from a 12 per cent lead over his rival, Senator John McCain, to only five per cent.
No pundit explained this rather puzzling development although human rights and union leaders protested that there would be attempts to stop pro-Obama voters from casting their ballots on Tuesday.
So, Obama and the people who back him would be well-advised to remain as vigilant as ever and not pop the champagne until it is all over.
They should also remember that in 1948, the media widely predicted that Harry Truman would defeat John Dewey by a landslide. Many were shocked when the tables were turned in Dewey's favour.
***
New districts will be too costly
Very soon, wananchi at the grassroots could be celebrating the creation of new district headquarters in dusty and sleepy towns near them.
And this time round, they will not have either the President or the Prime minister to thank for it. All the credit will go to a man from Marakwet West. His name is Boaz Kaino.
Just in case you missed the news, on October 22, Mr Kaino pulled the rug from under the feet of future presidents when he convinced his fellow MPs to unanimously vote in favour of his private members's Motion, which was seeking to turn all constituencies into districts.
I am told that the Government has the luxury of choosing whether to implement the Kaino Motion or just ignore it and go on as usual.
Assuming that it chooses to listen to the voice of the people's representatives, the Motion will put an end to presidential campaigns based on creation of new districts.
There are over 88 districts which could increase to 210 if the Government decides to implement the Kaino Motion.
The number is likely to increase to 270 considering that MPs are keen to review constituency boundaries before the next election.
If this resolution of Parliament dies a natural death, all is likely to be well with tax-payers as they will not have to bear the extra burden of having to pay for the new buildings and the large number of civil servants who will be bringing government "closer to the people".
The only people who will be mourning will be Mr Kaino and the wananchi who cannot afford to wait for the elevation of their villages into districts, complete with district commissioners, DOs, departmental heads from every government ministry, Sh11 million for roads and other monies for various public projects that are managed at the district level.
It must be said that implementing the Motion would drastically change the way the Government recruits its employees and potential candidates for the armed forces and public institutions including colleges.
However, it is also likely to cost dearly besides creating an impossibly large bureaucracy. Which means that there is need to temper fair distribution of resources with cost implications.
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Youth must set national agenda
An acquaintance who is just back from a peace-keeping mission in Nepal tells me that in that country, the youth are not to be trifled with.
They are such a powerful group that whenever they throw their weight behind a national issue, government officials sit up and listen.
The youth there are seen as the future and they have helped shape the national agenda of the country which, like Kenya, has been rocked by violence.
And herein lies a vital lesson for the youth in Kenya. For a long time, they have been used to wield machetes on behalf of politicians.
Kenya's destiny will be changed when the youth decide that they are custodians of its future and not the foot soldiers of elderly politicians.
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