MPs: Graft behind high fuel prices

Kenya MPs have cited ‘grand corruption’ and inefficiency in the energy sector as reasons behind the rising fuel and food prices.

They want the Energy Ministry to introduce reforms that would prevent firms from acting as the importers, distributors and retailers of oil products as the country.

Budalang’i MP Ababu Namwamba led the onslaught on the government side as he moved to have the House suspend its order of business to discuss the fuel prices as a matter of national concern.

He also tabled a petition from the Consumers Federation of Kenya to the House, which led civil society groups in protests outside Parliament as MPs made their way to the session.

MPs zeroed in on the National Oil Corporation of Kenya and the Energy Regulatory Commission as the two institutions that have failed in their mandate to protect consumers from the effects of high fuel prices.

Mr Namwamba said the government’s lack of willingness to tackle “a cartel of oil marketers” was the primary cause of the high fuel prices facing Kenyans.

“I submit that today Kenyans are paying the price of grand corruption. Until and unless we slay this vampire of corruption, we’ll continue paying its high price,” said Mr Namwamba.

He said the Energy ministry had ignored the recommendations of an inter-ministerial task force constituted in 2006 to investigate cartel-like behaviour in oil marketing companies.

Among these proposals, he said, were that the government should not allow the marketers to import, distribute and retail oil products, creating a monopoly.

He said the ministry had also been asked to introduce a Price Stabilisation Fund as well as address inefficiencies in the Kenya Petroleum Refineries Limited, Kenya Pipeline Corporation and NOCK.

Temporary Deputy Speaker Joyce Laboso is set to issue a ruling tomorrow (Thursday) on the admissibility of documents Mr Namwamba had in soft copy to substantiate his claims of corruption.

Rarieda MP Nicholas Gumbo, who seconded the motion, said the size of the Cabinet needs to be reduced

Gichugu MP Martha Karua accused the ERC of failing to perform its role effectively by instituting price controls that have not had a positive impact on the lives of Kenyans.

“How come the minister of Energy does not seem to know that the Energy Regulatory Commission is not performing its job? Is it that those who are comfortable are laughing at the poor?” she posed.

She criticized the tax cuts on kerosene and diesel announced by Finance minister Uhuru Kenyatta on Monday as they resulted in the reduction of prices of kerosene by Sh2 whereas the price had increased by Sh9 last week.

According to ODM Chief Whip Jakoyo Midiwo, the ERC “is cleaning up the mess created by NOCK.”

He was supported by ODM Nominated MP Rachel Shebesh, who also claimed that there is corruption at NOCK, and this is the cause of the current high prices.

Gwasi MP accused the Energy minister on failing to deal with corruption at the ministry and instead concentrating on other issues at the ministry.

He said a lot of money had been lost in the failed pipeline enhancement project by the Kenya Pipeline Corporation, the Triton saga and in the oil importation saga by NOCK.

Mr Mbadi challenged minister Kiraitu Murungi to resign if he is unable to rein in corruption at the ministry.

But Transport minister Amos Kimunya accused the MPs of focusing on the wrong areas rather than concentrating on the real causes of the price increase in fuel prices.

He said MPs had failed to address the matter at hand and hijacked the motion by Mr Namwamba to introduce “petty politics and name-calling” rather than discuss practical measures to reduce the fuel prices.

Energy minister Kiraitu Murungi said the MPs should have provided solutions to the problem rather than lament and point fingers.

“We cannot run away from the fact that the primary causes of the increase in fuel costs are external factors,” he said.

He cited the primary causes as the increase in the price of crude oil and the depreciation of the Kenyan shilling against the dollar.

Mr Murungi said the effect of the price formula cannot be felt now as it does not capture the cost of the fuel before it reaches the port of Mombasa.

He said the government would soon enable NOCK develop the capacity to negotiate long-term contracts for the supply of oil, which would ensure more fuel is bought when prices are low.

Mr Murungi said the only way the government could bring down prices was by reducing the excise duty it did on Monday as mandated by the law.

“Parliament is said to be a very powerful institution; it is said it can transform a man into a woman. Parliament can come up with ways to regulate the industry and come up with a solution,” said Mr Murungi.

He acknowledged that there are inefficiencies in the KPRL, KPC and the NOCK, but said these would be addressed and final solutions offered.