If members of parliament approve the bill currently under consideration, the Energy and Petroleum Regulatory Authority (EPRA) may lose its primary responsibility of establishing a price cap for petroleum products.
Julius Rutto, a member of parliament for Kesses, introduced the Energy (Amendment) Bill, 2024, which aims to change Section 10 of the Energy Act of 2019 by eliminating the role of Epra and allowing international markets and other factors to determine fuel prices.
The bill’s text states, “The primary objective of this bill is to amend the Energy Act of 2019 in order to remove the function of setting the ceiling of petroleum product prices from the authority that is responsible for energy and petroleum regulatory authorities.”
As a result, we will base the pricing of these items on global market prices in addition to other factors.
Specifically, the bill’s purpose is to eliminate sub-paragraph (ii) of paragraph (a), which is the provision that regulates the importation, refining, exportation, transportation, storage, and sale of petroleum and products, except crude oil from Epra.
Epra is required to control the importation, refining, exportation, transportation, storage, and sale of petroleum products, except for crude oil, according to Section 10 of the primary act, which is the section that the bill wants to change.
In April of the previous year, the government began the process of importing petroleum products under a government-to-government agreement. The deal was originally scheduled to continue for nine months, but it has since been extended until December of this year.
If members of parliament are successful in passing the bill that will influence the revisions, it will not only remove the function of regulating the sale of petroleum and petroleum products from Epra, but it will also eliminate its role in regulating other areas, including the importation, exportation, transportation, and storage of petroleum products.
However, the draft bill lacks details regarding the regulation of petroleum products’ import, export, transit, and storage.
According to the Parliamentary Budget Office (PBO), the implementation of the bill would result in a savings of Sh169,478,400 for taxpayers.
The directorate’s operating expenses, personnel compensation, and maintenance costs will primarily make up these savings.
In its analysis of the bill that was presented to the committee responsible for budgeting and appropriations, the office states that if the bill is passed into law, it will lead to the liberalization of prices and the promotion of competition among oil marketing companies.
This move will result in a reduction in petroleum product prices for consumers.
However, it did warn of price rises due to pricing vitality, quality and safety problems of the petroleum goods, possible shortages, and the risk of interruption of petroleum products, a move that will have an impact on smaller participants in the market.
On the other hand, the budget and Appropriations Committee will not publish or formally introduce the bill for the first reading in the House until it has considered the Treasury Cabinet Secretary’s opinions.
Kenyans anticipate that the committee will provide its findings on the proposal within thirty days.
