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{
    "id": 192238,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/192238/?format=api",
    "text_counter": 41,
    "type": "speech",
    "speaker_name": "Mr. Keter",
    "speaker_title": "The Assistant Minister for Energy",
    "speaker": {
        "id": 169,
        "legal_name": "Charles Cheruiyot Keter",
        "slug": "charles-keter"
    },
    "content": " Mr. Speaker, Sir, I beg to reply. (a) Yes, I am aware that the price of premium petrol in Nairobi and most other parts of the country is retailing at around Kshs100 per litre. However, I am not aware that the same is retailing at Kshs93 per litre in Mount Kenya region, as it was retailing at between Kshs99 and Kshs102 per litre last weekend. Some Ministry's staff went there and found out that it is not retailing at Kshs93 per litre, but between Kshs99 and Kshs102 per litre. (b) This discrepancy can be attributed to the following:- Dominant presence of large oil marketing companies with their cartel-like behaviour in such areas as Nairobi with relatively high income consumers and big concentration of vehicles which cause a high demand of petroleum products, hence high prices. It may be noted that prices in upmarket areas in Nairobi are also higher than in the middle and low income areas. The cost of doing business in Nairobi is higher compared to other outstations, including Mount Kenya region. This is based on different parameters, including and not limited to the following:- Land leases being higher than in other parts of the country. The rent, rates, staff wages and council charges on advertising are also higher. This in turn pushes the cost of products in Nairobi higher compared to other regions where the cost of doing business is lower. The adoption of the Open Tender System by the Ministry, which provides competition in the industry at the wholesale level at the FOB, Mombasa, encouraged many independent oil distribution companies to penetrate markets in and outside Nairobi. The cost in some parts of western Kenya is higher than in the Mount Kenya region mainly due to the transport cost. The cost is lower in some of the areas because of the independent companies that are coming into the market. The Ministry provided the Open Tender System, so that it can create competition. The price of petroleum products will be the same in all parts of the country. The cost of buying fuel will only vary in Mombasa. This will depend on the various companies in the market and their overhead costs. It is worth noting that documentation of pump prices is as a result of local taxes, the Kenya Pipeline tariff and the handling charges, which are fixed. The only thing which makes the prices vary from one company to another and from one place to another is the profit margin of the companies. A Ministerial Statement that was requested by hon. K. Kilonzo explained some of the measures which we are putting in place, as a Ministry, to empower the National Oil Corporation of Kenya (NOCK). They have already acquired 13 service stations. They are in the process of acquiring only 33 service stations. However, that only pushes the National Oil Corporation of Kenya (NOCK) to 5 per cent of the market shareholding, which is controlled by the multinational oil companies."
}