Kericho Senator Charles Keter. PHOTO | BILLY MUTAI | NATION MEDIA GROUP
Energy Cabinet Secretary Charles Keter has challenged the Energy
Regulatory Commission (ERC) to reduce the oil marketers’ margins
included in its pricing formula and cut fuel prices.
The
margin refers to the fixed component that takes care of costs incurred
by wholesalers and retailers to distribute fuel products.
He also wants the energy sector regulator to reduce water pumping tariffs to allow consumers access cheap clean water.
“The
cost of crude oil has gone down, the price of petroleum products is
still high. There is need to review the calculation of oil pricing in
the country. We know it can be done if you are keen to do it,” he said.
The
CS was speaking at the ERC offices when he met the regulatory board for
introduction. He also warned ERC that the government would not approve
any additional costs for energy.
AGAINST EXPECTATIONS
Last
week, the ERC announced a reduction in the prices of diesel and super
petrol by less than Sh2 per litre, against strong expectations that the
cost would drop by at least Sh10, going by the trend in the global
pricing of crude oil.
The
move was highly criticised by the Consumer Federation of Kenya (Cofek),
which accused ERC of engaging in “price fixing” rather than regulating
prices of fuel.
Crude prices are at
their lowest since 2003, trading at below $30 a barrel. A steep drop in
global oil prices has been experienced since mid-2014, following failure
by the Organisation of Petroleum Exporting Countries (Opec) to adopt a
production quota to curb oversupply.
Analysts
expect the drop to be sustained this year, supported by increased
production from Iran whose sanctions were lifted recently and a decline
in demand from China following a slowdown in its economic growth.
No comments :
Post a Comment