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"id": 56296,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/56296/?format=api",
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"speaker_name": "Eng. Gumbo",
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"id": 24,
"legal_name": "Nicholas Gumbo",
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"content": "The role of petroleum in the economy cannot be gainsaid. If you look at the inflation figures for March 2011; the month on month average inflation for March was 9.19 per cent as compared to about 6.5 per cent in February. Even though the contribution by oil and petroleum products were just over 3 per cent, the incidental and direct effect of petrol is known because where petrol is not available, prices of commodities go up, transportation goes up, bus fares go up and so on. These indirect consequences, is what hurts the economy and above all, is what hurts the common person in the streets of Kenya. We have said before, and we want to say it again, that our country must be sensitive to the plight of the poor. I have said it in many fora that it is almost unthinkable that we should let the price of paraffin, a poor manâs commodity, to, at any one time, go beyond Kshs40 per litre. That then starts to speak of recklessness and insensitivity on the part of the policy makers. Mr. Temporary Deputy Speaker, Sir, by whatever means, this country must set a ceiling price for paraffin. I want to inform the Minister for Energy that a majority of the people who vote for us use paraffin. Maybe you and I, because of the privileges we have in life, can go a step higher. It does not look right when the Government appears not to care about the plight of the people in Kibera, Mathare, Korogocho and Kawangware, for whom the main fuel is paraffin. The Government must find ways to make the price of paraffin affordable. In that regard, I want to laud the action the Central Bank of Kenya (CBK) took to increase the base lending rates. While in the short-term, it is going to help to stabilize the exchange rate of the shilling against the dollar and all the other major currencies, what it has done is to make credit unaffordable to most of us. Credit will just be available to fewer Kenyans, hence increase the cost of living. We must see the CBK action as only short-term. I have said it before, and the Minister is listening, that in the short to medium- term we have to find a way to address the tendency by major oil marketing companies to adopt predatory and unpredictable pricing of fuel. I cannot think of anyone in this country who does not stand to benefit from a well stabilized petroleum market. Mr. Temporary Deputy Speaker, Sir, as I run to conclude - and the Minister is aware of these things. What we have talked about, even in the Report, are short-term measures. The Minister knows where the real problems lie. For example, right now in Mombasa, there is only one jetty. That is a major handicap. For the major ships to offload, if they come more than one, one has to wait at the high seas at very great cost. The issue of a second jetty in Mombasa has to be looked at. There is also the problem of not only inadequate but outdated technology at the refinery. These are things the Minister knows about. In fact, sometimes I begin to wonder why we say we are inviting Uganda to refine their petroleum products in Mombasa when they start mining oil. Are we really proposing a gimmick or a reality? Mr. Temporary Deputy Speaker, Sir, then there is the storage at Mombasa; it is not adequate. You know the problems with the pipeline between Nairobi and Mombasa. Not only is it inadequate but two years ago, an attempt to double its capacity failed. This is something that we know. These are the constrictions that make the price of fuel expensive for our people. This is something that I think the Minister can enforce; all the major oil marketing companies have depots in Nairobi, Nakuru and Eldoret. What are those depots for if they cannot be used to efficiently evacuate the pipeline, so that more supply can be released? I think if we can look at that in totality, it will help. Then, of course, we have to look at the long-term also. I do not believe that our strategic fuel reserves are adequate to supply certain upheavals in prices and address uncertainty in fuel pricing. Mr. Minister, we have to look at our strategic fuel reserves, so that this country may be able, when we are facing uncertainties, to supply people for, say, a month or so. You know it, and we have discussed it in the Committee; we need a Petroleum Fuel Stabilization Fund, so that we are able to take price shocks. That is extremely important. Then, like all countries of the world, let us get into long-term--- Mr. Temporary Deputy Speaker, Sir, through you, I want to address the Minister. Through the Chair, Mr. Minister, let us get into long-term contracts. There are countries in this world which sign ten to 20-year long-term, supply contracts of fuel at a price of, say, US$65 per barrel. What the long-term contracts do is to safeguard you. I just read in the newspapers that the price of fuel per barrel is climbing to about US$126. If we had long-term contracts which were signed may be in the 1990s, that would not affect us. So we have to look at this. Finally and fundamentally, all these things will be in vain if the Kenyan economy does not grow. We must do everything that we can to make sure the economy grows. Most importantly, it is not just the percentage figures of economic growth. When His Excellency the President was delivering the Special Address here, he mentioned to us that the economy grew by about 5.6 per cent last year. Those are figures. To us, the real indicators of economic growth will be the number of youths that are taken into employment and the number of Kenyans who have moved from desperation to being able to feed their families. So, as we work towards achieving higher economic growth, let us also be given figures on how economic growth has translated into a better life for the people of Kenya. With those remarks, I thank you and beg to support."
}