Nairobi, March 15, 2011
Despite the several attempts by the government to reduce oil fuel price in Kenya which included blocking the purchase of fuels from dealers other than the National Oil Corporation of Kenya, unveiling a campaign to compel fuel marketers to lower prices by more than Sh. 10 while alerting consumers on where to procure affordable fuel and cautioning consumers which fuel dealers to avoid, reintroduction of price control bill and substantial allocation to of the fuel market to the National Oil Corporation through introduction of provisions in the supplementary budget to give it the authority to determine fuel prices, consumers have continued to get a bad deal on oil fuel pricing for too long in Kenya with the impending escalations only meant to further worsen the consumer predicament.
The unprecedented inflation of oil fuel prices in Kenya is triggering the commodity price increase with cost burden passed down to consumers in the form of higher-priced products with no signs of abating. Consumer can no longer afford the basic food stuffs since prices have escalated beyond their reach. The surging oil prices have eroded consumer’s purchasing power further even as majority literally goes without sufficient food. Overwhelming is the effect on households already struggling to meet their daily food and nutrient needs, representing a threat to basic survival as malnourished children is on the offing giving dwindling hopes to the realization of millennium development goals.
In mitigating the devastating effects on consumers’ welfare arising from the inflation on oil fuel prices, government needs to intensify efforts to avert routines which are harmful to the economic wellbeing of consumers through sound fiscal and monetary policies to enable consumers obtain most favorable benefit from their scarce resources. Therefore it should move with speed to lower the tax levels on basic consumer good like maize flour, wheat flour, cooking oil, rice, sugar and kerosene. Government should enact legislations to limit profit-taking oil firm in order to protect consumers against the effects of erratic price fluctuations in the fuel markets while investing on the efficiency of the refinery process to reduce on operation cost.