Kiraitu wages war on high fuel prices

Oil companies must reduce pump prices for petrol and diesel by at least Sh10 a litre or face a Government campaign to force prices down.

Energy minister Kiraitu Murungi on Monday announced the unprecedented war against firms that ignore the recent fall in the cost of crude oil and keep their prices artificially high.

The campaign will use the media to name stations where the prices remain high, and urge drivers to boycott them in preference to those that adhere to the Government’s recommended Sh10 cut.

“The ministry will continue to monitor oil prices and cannot allow Kenyans to be exploited by a few cartels in the petroleum industry,” he told the Press at the Kenyatta International Conference Centre.

Minister’s order

If oil companies implement the minister’s order, pump prices should drop to below Sh100 a litre — the amount motorists were paying three months ago.

The minister’s threat came as Kenya Association of Manufacturers warned of looming job cuts due to the high cost of production.

They appealed to the Government to intervene over the high cost of electricity.

Last week the Energy Regulatory Commission urged the oil companies to cut pump prices by over Sh8 per litre, but the appeal was largely ignored.

Mr Murungi has ordered his Permanent Secretary Mr Patrick Nyoike to set aside funds to finance the media campaign.

Major oil firms including Shell, Kenol/Kobil and Caltex said on Monday they were still consulting before issuing a statement.

Fuel prices shot up to over Sh100 a litre two months ago with some dealers selling a litre for as much as Sh110.

After President Kibaki appealed to dealers to reduce prices, in line with a fall in the cost of imported crude oil, they reduced their prices by only Sh4 a litre.

Dealers around the country on Monday implemented a further round of cuts, but only by between Sh1 and Sh3 a litre.

Lowest price

In Mombasa where petrol had hit Sh106 a litre, the lowest price was Sh102 for petrol and Sh98.50 for diesel.

The lowest priced petrol in Nairobi was Sh101 a litre while the highest was Sh104 a litre. The State-owned National Oil Corporation was selling at Sh100.9 per litre of petrol.

In Nyeri, the lowest price was Sh104 for petrol and the highest Sh107. Diesel was Sh100 and Sh102 a litre.

Dealers in Western Kenya were offering petrol at Sh103 a litre and diesel at Sh100.

Mr Murungi said cuts averaging Sh4 were insufficient.

The minister, who began his price crusade last week, said the Energy ministry would sponsor a programme on radio stations to advise Kenyans on where to fuel.

“It is only those petrol stations that will offer the lowest prices that will attract the largest number of customers,” he said before receiving about Sh22 million from both the private and public sector organisations sponsoring the National Energy Conference slated for October 7-9.

Launching the Conference’s website, he said the Sh10 a litre reduction was based on a decline in crude oil prices at the international market by as much as $40 ((Sh2,720) a barrel.
Last week the market regulator, the Energy Regulatory Commission, urged a price cut of Sh8.49 a litre.

ERC director general Kaburu Mwirichia said the cost of crude had fallen from a high of $147.27 (Sh10,014) a barrel on July 11, to $117.20 (Sh7,960) a barrel on September 4.

Mr Murungi said yesterday his ministry had stopped fueling its vehicles at petrol stations run by the independent marketers, opting for the State-owned National Oil Corporation pumps.

“It is a duty, as a Kenyan, to buy from National Oil,’’ Mr Murungi said last week.

However, the Minister ruled out any action against the oil companies until after the Conference where politicians, technical experts, associations and ordinary Kenyans will address the challenges and opportunities in the energy industry.