Fuel subsidy plan faces delay amid confusion

 

Confusion surrounding the roll-out of a multi-billion shillings fuel subsidy scheme to cushion consumers against high prices may delay the plan as various government officials give conflicting accounts on the implementation.

Energy CS Charles Keter maintains the regulations to roll out the plan have been forwarded to the Attorney-General (which denies having received them) for review, while the Department of Petroleum says the regulations are yet to be completed. A case filed by lobby group Consumers Federation of Kenya (Cofek) has further fuelled confusion with the fate of the case challenging the increment of the petroleum development levy set to add to the list of reasons why the government may delay its planned price stabilisation plan.

“What regulations are you talking about, I haven’t seen any at the AG’s office, and I can assure you we haven’t received them,” Solicitor-General Kennedy Ogeto told Sunday Nation in response to queries about the regulations to roll out.

Price stabilisation

Petroleum PS Andrew Kamau also said the regulations were yet to be developed more than seven months since the government began collecting an additional Sh5 for every litre of diesel and petrol purchased to create a price stabilisation fund. The fund has since hit a high of about Sh16 billion going by the monthly average consumption of fuel products since it was increased to Sh5.40 per litre.

Mr Kamau said the process is still ongoing and will proceed to public participation before it is gazetted and rolled out; a process that will take at least two months.

“The regulations are still being developed and they will go through public participation before they are used in the price stabilisation plan. We will need about 60 days to be through with the process otherwise we may stand accused of breaching the law like we already have a case in court challenging the process,” Mr Kamau said hinting that the Cofek case may drag the process further.

Cofek’s secretary general Stephen Mutoro, however, says the government may be using the case filed last year as a scapegoat to keep consumers out of a subsidy plan they have been contributing towards over the months.

Mr Mutoro questioned why the government was quick to load the increased petroleum levy on consumers without having any legal ingratitude on how it would be implemented.

Petrol price

“There is no court order yet barring the government from using the billions it has collected to cushion consumers from the increased fuel prices. Our case is not in any way a barrier and let no one use it as a scapegoat. The truth is that the money so far collected even before the regulations were set up is hard to account for and we even doubt whether that money is still there anyway,”Mr Mutoro said.

Amid the arguments, consumers caught up in a decade-high petrol price hike and a 30-month high cost of diesel may be forced to pay more next month given that the international crude prices have shown no sign of dropping.

The Energy and Petroleum Regulatory Authority, which had used $61.61 per barrel (February 2021) in last week’s pricing that sent shockwaves to consumers will be using a higher price for the next pricing cycle given that fuel prices have hit $70 per barrel and averaged higher than that of February.

Crude oil prices are expected to stay higher that $70 per barrel in the coming months as demand recovers in the international market and availability of oil remains tight due to the curbs put in place by the Organisation of Petroleum Exporting Countries (OPEC).

The pain at the pump has been served with an added burden to electricity consumers who are now paying close to 20-month high fuel cost levy, which is charged on every unit of power purchased to take care of electricity generated using diesel generators.  BY DAILY NATION