Economics - East Africa - Kenya - Finance - Justice - Oil
Kenyan minister addresses growing oil concerns
The Kenyan media last week went all out against foreign multinational companies that dominate the oil industry as the government launched a campaign to force oil distributors to lower the pump prices for refined oil.

Energy Minister Kiraitu Murungi stole the limelight in a rare publicity blitz a week after President Mwai Kibaki asked oil firms to lower the price of oil, which peaked above the US$ 1.3 a litre in the local market, threatening local industries.

Kenyan press gave prominence to Murungi’s campaign to have pump prices cut by at least 10 Kenyan shillings several days after fruitless efforts to enforce the reduction by the Energy Regulatory Commission, recently created to act as a market regulator for the entire energy sector.

The minister said the price of the crude oil had recorded a drastic decline but most of the local oil marketers had not lowered their prices to reflect the global fall in prices. He pledged to monitor oil prices and post a daily price tag on local newspapers, while ordering the Energy Ministry staff to carry out a daily survey on oil firms still charging higher prices for the refined oil. He also urged consumers to avoid oil firms charging higher prices.

President Kibaki also made local headlines on a speech he made during the 63rd session of the UN General Assembly meeting, where he warned world leaders to pay close attention to the escalating international oil prices to sustain world peace .

The Kenyan leader had said there would be no peace unless world leaders devised a system to stop oil-producing states from manipulating crude oil prices by relying on speculation as the main driver for the pricing of the crude oil.

Kenya’s energy feud went a notch higher this week after a local professional organisation threatened to sue the energy minister for failing to push for lower energy prices.

At the same time, the Kenyan Association of Manufacturers (KAM) has warned the government that its industrialization agenda was likely to falter massively as t he high energy prices, mostly electricity, was forcing manufacturers to relocate to neighbouring Uganda and Tanzania.

It was also reported that some local firms had relocated operations fully to their Ugandan and Tanzanian subsidiaries or increased production capacities to avoid the high cost of electricity in Kenya.


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