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"id": 233900,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/233900/?format=api",
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"speaker_name": "Mr. Ochilo-Ayacko",
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"id": 347,
"legal_name": "Ochilo George Mbogo Ayacko",
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"content": "Thank you, Mr. Temporary Deputy Speaker, Sir, for giving me the opportunity to make my remarks on this very important Bill. I want to take this opportunity to congratulate Mr. Murungi on his re-appointment as Minister for Energy. I want to equally congratulate him on his new-found position of being born-again. The political mood of this country requires a born-again person, so that things can move forward. I also want to congratulate the persons who contributed to the drafting of this Bill. The Bill will go a long way towards improving what this country has been looking forward to. If I heard the Minister correctly, he said that his core mission is to fight darkness. I want to propose to him to add to his core mission, \"the desire to provide Kenyans with affordable energy.\" Therefore, in the process of fighting darkness, the Minister should ensure that energy becomes affordable. If energy is unaffordable, Kenyans will have only a pipe dream. They will not get the reality that they have been looking forward to. So, affordability is a very key component of what Kenyans are looking forward to. Mr. Temporary Deputy Speaker, Sir, talking of affordability of petroleum products, this Bill seeks to make certain provisions on petroleum products, including natural gas. The other day, November 21, 2006 PARLIAMENTARY DEBATES 3803 this House passed a Motion which sought leave for the introduction of a Bill to this House, to empower the Minister for Energy to control the prices of petroleum products in this country. The concept of liberalisation has always been forced down our throats. Liberalisation is a concept we all agree with, largely because it has gained currency as the world trend that we should liberalise business, trade and many other things. I would, therefore, like to propose that we include a clause in this Bill so that, if necessary, the Minister may invoke to control the pump prices of petroleum products. That way, we will continue to liberalise the petroleum sector, but the Minister will have a legal basis on which to intervene when petroleum dealers in the country become belligerent, as they are now. It demeans the authority of the Government for the Minister of Finance and the Minister for Energy to plead with dealers of petroleum products to lower the prices of the commodities. There should be a provision to be invoked by the Minister to control the prices of petroleum products whenever it becomes necessary, just the way the President of Kenya may, when necessary, invoke the emergency provisions and declare a state of emergency. Mr. Temporary Deputy Speaker, Sir, as we all know, the prices of petroleum products keep on rising and falling, depending on the supply and demand of crude oil in the world market. Dealers of petroleum products in this country are quick to adjust upwards the pump prices whenever the price of crude oil increases in the world market. However, when the prices fall, they do not lower their pump prices. It is very offending for a Government with authority over a territory it operates in, to plead with business people to reduce the prices of such essential commodities. Therefore, there should be a specific provision, which should be reluctantly invoked by the Minister responsible for energy when the desire for profit and personal aggrandisement drive petroleum products marketing companies to keep the prices up. This Bill does not have such a provision. Last week, Parliament resolved to give the Minister such powers. Power is sweet; it exercises what should be governed by law. However, we do not expect the Minister to exercise the powers we are going to give him just as such, but rather have them so that whenever it becomes desirous, he can exercise them. What is ailing the petroleum sector is that the petroleum outlets where we buy the petroleum products are 95 per cent owned by the multinationals. Whenever they play golf together or go for holidays, what they think of is: \"How much profit have I made for my organization?\" I think what should happen, particularly in Nairobi and other areas where there is a high concentration of multinationals is the fact that the Government should reserve along the major roads sites for a public body like the NOCK. If you drive along, for example, Langata Road, you will find that nearly all the possible sites there have been reserved for the multinationals. So, even if you are desirous of expanding the NOCK for purposes of offering effective competition, there is no specific site reserved for them there. If you drive along Waiyaki Way, you will find a similar situation. So, this has made it impossible for the much desired competition, which is a key component in a liberalized economy, to take foot. You will also find out that people with modest capital; people who can compete in terms of offering competitive prices to the general public have not been given what we call a \"low enough entry point\" to market petroleum products. Currently, there is a requirement that people who trade in petroleum products must be associated in a commercial way with the oil refinery. That, in a way, adds to the business cost that those independent petroleum traders have to get involved in. You will also find that there is a requirement in our pipeline, I do not know whether it is still there, it is called line--- New entrants are required to adhere to it in order to have access to the pipeline. In other words, the cost of entry into petroleum business has been inhibitive, and this has made it very difficult for new entrants to come in. So, you can predict that next year, the same, same players will be there. This year, the same, same players will be there. That has tended to create the monopolistic or oligopolistic pattern that we see in the petroleum sector. 3804 PARLIAMENTARY DEBATES November 21, 2006 Mr. Temporary Deputy Speaker, Sir, the petroleum sector affects price in this country, and it is important for us to keep sight of it. The Minister for Finance spoke ahead of me, and it is important for his representative, if he is not here, to note that another factor that makes it very expensive for us to access petroleum products is the level of taxation in this country. We need to keep focus. We need to look at what percentage in terms of the price build up we are putting on the tax. Taxes on petroleum products are very high and I think that is part of the reason why we are buying a litre of petrol at nearly Kshs80. It may appear good to collect a lot of tax, but if that tax is occasioning poverty and desperation, I think it is the responsibility of the Government not to lose sight of the component of affordability when it comes to the provision of energy in this country. While still on that point of affordability, I would like to urge the Government, particularly the Ministry of Finance, to note that they have never availed sufficient money to the Ministry of Energy. Energy is very important to this country. We keep on saying that we do not have sufficient electricity in terms of capacity and distribution, but these things do not come for free. These are things that come with sufficient budgeting, sufficient allocation of money and also sufficient training given to the people who are supposed to handle this task. So, it is important for us, as a country, to keep on budgeting sufficiently for the Ministry of Energy so that we do not bark at them or complain to them when we do not give them the money and what it takes in terms of material support to reach out to Kenyans in terms of provision of electricity. Liberalization, as has been said by myself and the speakers who have spoken before me, does not mean that the Government abdicates its responsibility of providing energy. I think that liberalization means inviting the private sector to participate in the areas where they are best equipped to participate. But it does not remove the responsibility from the shoulders of the Government in terms of provision of energy. So, as we continue to liberalize, and we are privatizing the KPLC, let us know that it is still the Government's responsibility to distribute energy. Let us know that the responsibility to extend the provision of electricity, not only to rural areas but also to upcoming urban areas and places, like Mandera and Lodwar, which may not fall within the Rural Electrification Agency, is still squarely the responsibility of the Government. So, as a Government and Parliament that desires energy, we must make sure that we provide sufficient money to areas that may not be covered by the Rural Electrification Agency. Mr. Temporary Deputy Speaker, Sir, the establishment of the Rural Electrification Agency here is timely because access to electricity in rural areas has been very slow. Perhaps, it has been very slow because it was left to the Ministry of Energy, which was not equipped with the infrastructure to do so. It was also left to the KPLC, which had to balance between the desire to get some profit, meet its overheads and also provide rural electrification. It is timely to have an independent or autonomous agency that is going to provide electricity to rural areas because that agency may look at it in terms of fairness and may also apply itself more than other departments, like the Ministry of Energy, which has policies to look at and which also has oversight responsibilities and many other issues to attend to. Mr. Temporary Deputy Speaker, Sir, the establishment of this agency and the Energy Regulatory Commission is good. But the point that has been captured by the speakers before me to the effect that its appointment and composition may not capture professionalism is something that needs to be addressed. If you look at the qualification of the chair, it says:- \"The chairperson shall be appointed by the President\". That is the only qualification. It is not captured here that the chair shall be a person of this kind of learning or this kind of knowledge. It is only said that the person shall be appointed by the President. Today, we may have a good President, or let us say that, yesterday, we had a good President. But what we do know about the future? Assuming we have a President who, for one reason or the other, may have his own description of a qualified chair, we may wind up in problems in terms of the competence of the chair. So, it is important that we not only capture the mode of November 21, 2006 PARLIAMENTARY DEBATES 3805 appointment, but also the qualification of the appointee. The Permanent Secretary, Ministry of Energy and the Permanent Secretary, Ministry of Finance are members of the ERC. The Director- General is also said to be an appointee of the Minister, as recommended by the ERC, and qualifications are put thereunder. The other members of the ERC are said to be appointees of the Minister as representatives of stakeholders who are not named. I think this may occasion serious problems. It is something that we should improve upon. What we need to have is not an independent energy regulatory commission, but one that is autonomous in terms of its discharge of its professional duties. If you look at the word \"independent\" it may mean that it is pulling away from the Government. I think what we need to have here is a commission that is autonomous in terms of its discharge of professional responsibility. So, we need to capture a mode of appointment that will take on board professionals. When they are discharging the onerous functions that are bestowed upon them by this Bill, they should be doing so in a manner that is not interfered with by anybody, but which is guided upon by the policies put in place by the Government. So, \"independent\" as interpreted by other people may be erroneous. This is because we are not establishing a constitutional body, but moving down to the best practice where professionalism is used to augment Government functions. If we look at how the members of the rural electrification agency are also appointed, I think the points that apply to the ERC also apply to it. This is because what modern governments are putting in place is professionalism to get the best professionals to augment Government services to the people. I want to conclude by saying that it is not true that we have not been having legislation in this country. What we have been lacking is sufficient budgetary support for the departments of Government that are supposed to provide these services. So, we may pass this Bill and enact it into law, but if we do not give it sufficient funding, this beautiful objective and very good words that have been put in place may come to naught because we have not budgeted for them sufficiently. With those few remarks, I beg to support."
}