Africa Focus: Kenya's consumer watchdog calls for further drop in fuel prices

Kenya's consumer rights lobby group on Thursday called on the government to further cut retail fuel prices, saying the latest prices were not a fair representation of the would-be actual pricing.

The Consumer Federation of Kenya (Cofek) said in a statement that there is no proper reason as to why consumers should not pay less than 0.93 U.S. dollars per litre of super petrol in Nairobi.

"We do not accept the latest prices as fair representation of the would-be actual pricing. The price is a deceptive public relations exercise on the part of the Energy Regulatory Commission (ERC)," said Coefk chairman Stephen Mutoro.

"Granted, the latest price reduction met at least 50 percent of our expectations. This can be attributed to the recent consumer pressure for lower pump prices to reflect the plummeted international crude prices," Mutoro added,

He said the latest prices of fuel, which will be at their lowest since 2010 when the energy regulator stated moderating the pump prices, should still come down further to reflect the global decline.

The country's energy regulator ERC on Wednesday said the prices of super petrol will decrease to 1.02 U.S. dollars per litre, diesel to 0.91 dollars per litre, and kerosene to 0.72 dollars per litre.

The latest fuel price drop is the highest since the ERC was set up four years ago. The regulator took into account the weighted average cost of imported refined petroleum products which necessitated the reduction.

However, Mutoro said even when weighed against prevailing weaker shilling and fixed taxes, the usual excuse of time lag between purchase and actual landing is unconvincing.

"The so-called ERC formula is out of date with reality. It has too many absolute and fixed value inputs, including nonscientific margins for wholesale and retail oil marketing companies (OMCs)," he said.

Global prices of crude oil have fallen drastically since July 2014, and naturally Kenyans expect the retail prices of petroleum to fall accordingly.

ERC said the prevailing international prices will be reflected in the local pumps after one month or so because the petroleum products that Kenya imports take 30-45 days to arrive.

But the consumer watchdog said it's high time the ministry of energy and petroleum accepted that the ERC anti-free market economy practice of fuel price fixing is an orchestration of fraud and a clear injustice on the hapless consumers.

"We call upon the President to ensure that ERC only regulates the business environment and ensures that the energy sector is weaned of corruption, and in its place a sustained competition is attained," Mutoro said.

He said Cofek will send a petition to the National Assembly and the Senate, seeking to amend the Energy Act with a general view of improving governance, restructuring ERC and relieving it of the responsibility of tariff setting. Endi