Justus Ondari
10 July 2009
Nairobi — The government will still re-introduce price controls in the oil sub-sector even after being advised against the move by the National Economic and Social Council.
The council, whose members are drawn from the public and private sectors, academia and civil society for the purpose of advising the government on key policy matters, discouraged the re-introduction of the controls.
"The council advised against the price controls during its last meeting," Energy PS Patrick Nyoike said of the meeting held on March 16 this year.
Pending gazettement
He, however, told the Saturday Nation that a legal notice aimed at bringing back the controls is ready.
"A legal notice to introduce the controls is ready pending gazettement at an opportune time," he said on Friday.
The PS maintained that Energy Minister Kiraitu Murungi is monitoring the market trends before deciding on when to gazette the notice to effect the controls.
Mr Nyoike's statement comes in a week during which the cost of petrol went up by an average of Sh2 per litre while diesel rose by about Sh4 to an average of Sh76.9 per litre of petrol and Sh71.9 for the same quantity of diesel respectively.
Oil dealers defended the price increases attributing the move to recent price changes of crude oil in the international market.
After sliding to a low of $40 per barrel in 2008, there has been an upward swing of the prices from February this year to over $70 per barrel.
The push towards fuel price regulation peaked late last year following a sharp rise in the international crude oil price to $147 per barrel.
The result was an increase of petrol pump prices to an all-time high of Sh110 per litre.
What followed was hue and cry from motorists and other consumers forcing the industry regulator, Energy Regulatory Commission, to design a price control formula that it forwarded to Mr Kiraitu to gazette.
The commission, through the formula, proposed a maximum margin that dealers would charge above the cost of international crude oil.
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