Keen observers of developments in the petroleum industry must have noticed that there has been a rapid surge in pump prices in recent months – far ahead of the crude oil price recovery.
Petrol is already retailing at nearly Sh110 per litre yet crude prices are yet to touch the $70 a barrel in the global markets, meaning it could soon go beyond Sh120 a litre.
The blame lies squarely on the Kenya government, which unlike its counterparts in the region, has yielded to external pressure to introduce all manner of taxes on key consumables like fuel with wider ramifications on the economy.
Kenyan consumers must be worried of the fact that they are already paying the highest price for a litre of petrol in the region, and this is before the planned introduction of value added tax on petroleum products later in the year.
This is a puzzling development, especially in a country that has set its eyes on growing a vibrant manufacturing sector.
Given its pivotal role in industrial operations and in the transport of goods – overly expensive petrol will have the effect of increasing the price of anything produced in Kenya and rendering them non-competitive in global markets.
This is the reason it would be wise for authorities to tread carefully in their management of this resource.
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Note: The results are not exact but very close to the actual.
