ERC should have done more despite the drop in fuel prices

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Energy Regulatory Commission (ERC) has announced new reduced prices of petroleum products which will be in force from 15th January 2016 to 14th February 2016. The move that is in accordance with Legal Notice No. 196 of 2010 on The Energy (Petroleum Pricing ) Regulations, is as a result of a drop of the average landed cost of Petroleum products. The average landed cost of imported Super Petrol has fallen by 4.32% from US$  542.02 per ton in November 2015 to US$518.63 per ton in December 2015. Similarly , the average landed cost of imported Diesel during the period decreased by 7.63% from US$475.53 per ton to US$439.25 per ton. In addition the average landed cost of Kerosene dropped by 17.05% from US$485.70 per ton US$402.87 per ton.

 In case consumers feel shortchanged at petrol stations they can now check for petroleum pump  prices by sending the message ‘Price <space> name of a major town’ to 0707667623. Any petroleum company found charging more for fuel than stated by ERC will be fined Kshs. 1,000,000 or risk losing their operating license.

However in as much as motorists and Kenyans at large are grateful for the fact that the prices of fuel haven’t gone up, there is a general feeling that ERC could have done better. This is because a drop in Kshs. 1.42 for petrol in Nairobi does not make alot of difference to motorists. Basically ERC was formed to stop the exploitative nature of oil marketers who used to price oil products at exorbitant prices in total disregard to the world prices. Sadly ERC has failed to live up to its expectations with some lamenting that it usually takes the side of oil marketers rather than the consumers it is supposed to protect. Given it’s track record many are calling for the liberalization of the sector so as to have prices determined by forces of demand and supply with the hope that the prices will go down. This is more so now that the world crude oil prices have taken a dip with a barrel of oil going for as low as $30. Below are the revised prices.

 

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