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{
    "id": 7303,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/7303/?format=api",
    "text_counter": 464,
    "type": "speech",
    "speaker_name": "Mr. Mbadi",
    "speaker_title": "",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "cause of fuel shortage in early May, 2011, and many other things which I may not mention at this time due to constraints of time. We did meet with officers from the Ministry of Energy led by the Permanent Secretary. We also met with the Minister and we had a very fruitful discussion. The Permanent Secretary attributed the high cost of fuel on the rising international crude oil prices. He talked about the weak value of the Kenyan currency to the dollar and the turmoil in the Middle East. It also emerged from the Ministry of Energy officials that the Government had reduced excise tax on kerosene by 30 per cent, which was effected on 28th April, 2011. The Office of the Deputy Prime Minister and Ministry of Finance should have introduced a Bill in Parliament to waive the taxes on kerosene. The Minister did introduce the Bill later on because there was a delay. The Minister for Energy explained that there were sufficient consultations between the President, the Prime Minister, the Ministry of Energy and the Ministry of Finance before any policy changes were announced, specifically the policy announced by the Prime Minister that the Government would reduce Excise Duty on kerosene and diesel. There was extensive consultation in Government. The Ministry of Energy also explained the other factors which have contributed to the sharp rise in prices as follows:- One, continued existence of piracy activities in the Indian Ocean are responsible for increased freight cost of petroleum products. There are also demurrage charges incurred by ships waiting to discharge commodities at the Mombasa Port. Secondly, they talked of clogging of the pipeline system by oil marketers who have no adequate storage facilities. Out of these two, we felt that something could easily be done on the second one which is clogging of the pipeline system by the oil marketers who have no adequate storage facilities. We felt there was negligence on the part of the management of the pipeline system in this country. There was reluctance and insensitivity on the part of the Ministry to take action to ensure that this problem is not encountered even as we appreciate that, probably, the issue of piracy is a bigger one and is probably, a regional if not a global concern. Mr. Temporary Deputy Speaker, Sir, oil sector marketers and other oil stakeholders also raised certain concerns. One of them is having only one jetty at the port of Mombasa in which oil products are discharged. They also said that this country lacks strategic oil reserves. Inefficiencies at the Kenya Petroleum Refineries Ltd. were also cited, which marketers alleged contributed an additional Kshs5 to Kshs8 to the litre. There was also talk of infrastructural constraints, particularly the Kenya Pipeline Kipevu Jetty and the need for the establishment of a common storage facility in Nairobi. The marketers using the pipeline as a storage facility thus clogging the system and denying importers a chance to discharge their products in the pipeline was also sighted. Actually, it came from these oil marketers; that this is done with the express knowledge of the management of the pipeline system. Mr. Temporary Deputy Speaker, Sir, as to why some marketers would be allowed to use the pipeline as a storage facility begs question which I think the various officers responsible need to address. The Ministry of Energy officials led by the Permanent Secretary confirmed that the Kenya Petroleum Refineries (KPR) Limited could only remain viable if it stuck to the proposed time lines of modernization or else it should be shut down. The oil marketers also committed themselves to abide by the resolutions."
}