Pain at the pump: ODM puts EPRA on the spot over latest fuel price increase

Pain at the pump: ODM puts EPRA on the spot over latest fuel price increase

The Orange Democratic Movement (ODM) has criticized the Energy and Petroleum Regulatory Authority (EPRA) over the latest increase in fuel price accusing the agency of insensitivity.

According to the party’s Secretary General Edwin Sifuna, EPRA’s announcement poses a danger to the President’s Big Four Agenda items.

“Silence on our part at this time will amount to complicity, and we therefore unequivocally state that we are opposed to this increase in the price of fuel. We demand that this decree is rescinded before it becomes effective,” Sifuna said in a statement on Friday evening.

The statement was released hours after the EPRA announced an upward review on fuel prices with motorists now having to pay more than Ksh.120 per litre to fill their vehicle with petrol.

Diesel and kerosene prices have also surged by Ksh.5.75 and Ksh.5.41 a litre in the latest maximum pump prices review by the authority.

Sifuna insisted that there is no moral ground on which to levy more taxes on Kenyans. “In African culture, you do not milk a dead cow!” he said.

His statement comes amidst the backdrop of a government slapping fuel products with new levies and taxes after a failed attempt for enforcement of price controls.

In 2011, the government moved to enforce price controls by effecting maximum pump prices through the then Energy Regulatory Commission (ERC).

The enforcement of the price ceilings on fuel products was at the time aimed at cushioning Kenyans from high fuel prices as international crude prices averaged north of Ksh.10,700 ($100) at the time.

By working out a formula which cushioned Kenyans while at the same time guaranteeing profit margins for oil marketers, the price fixing regime was seen as a cure for runaway pump prices as volatility struck the international market.

The price controls would work as intended in subsequent years through to 2014 when global oil prices took a turn for a slide.

In the years following the turn in prices, global fuel price have peaked below the $100 mark per barrel to signal relief to users especially in net oil importers such as Kenya.

The relief witnessed at the global stage especially this year has however failed to register back home.

The higher taxes and levies on fuel have now eclipsed the underlying cost of fuel in recent months following the enactment of more tax legislation on products.

In April for instance, the Tax Laws (Ammendment) Act allowed excise levies to be computed in the calculation of VAT on fuel leading to even higher prices.

During a past interview with Citizen Digital, Genghis Capital Senior Research Analyst, Churchill Ogutu called for a reversal in recent tax measures to spare Kenyans from the looming devastation in fuel costs.

“If recent ammendments could be reversed, we could see costs on fuel VAT for instance comes down. The government could also push to lower taxes and levies on fuel products to cushion Kenyans from higher petrol costs,” he said.

Additional report from Kepha Muiruri

latest stories