Plans to introduce price caps for wholesale fuel products are at the final stage after the energy regulator tabled new regulations in Parliament.
The Energy ministry wants Parliament to approve the Energy (Petroleum Pricing) Regulations 2022, which will empower the Energy and Petroleum Regulatory Authority (Epra) to enforce the maximum wholesale pricing of petrol, diesel and kerosene sold in Kenya or imported through the open tender system.
The new regulations repeal the Energy (Petroleum Price) Regulations 2010, which set the framework for establishing retail pump prices.
The repealed Energy Act and the now revoked 2010 regulations did not provide for capping of the wholesale prices.
“This (revocation) caused a bit of market distortion since the wholesalers would sometimes buy products at the depot at prices close to the retail prices. Further, penalties for non-compliance were lenient,” said Daniel Kiptoo, Epra chief executive in an explanatory memorandum to MPs.
“These regulations seek to ensure consistency with the Petroleum Act, 2019,” said Dr Kiptoo.
The new regulations repeal and replace the Energy (Petroleum Pricing) Regulations 2010, which was revoked on October 14, by former Cabinet Secretary Monica Juma.
Under the regulations, Epra will compute and publish wholesale and retail prices of petroleum products to take into account changes in law impacting the costs of the products at any time between the monthly publication periods on the 14th day of every calendar month.