In Summary
  • ERC’s pricing Friday is clouded in uncertainty with a contempt proceeding on its doorstep for failing to respect a Bungoma High Court order.
  • Another oddity facing price revisions is the increasing costs for crude oil through the month of August which will be key in determining the pump prices.
  • ERC uses the Platts data on the price of Brett crude as the benchmark for international oil prices.
  • Petrol, diesel and kerosene carry a heavy load of levies and taxes raising hundreds of billions for the government in revenues.

The Energy Regulatory Commission is staring at a deep dilemma Friday as it readies to announce new pump prices amid the controversy over the 16 per cent value added tax on petroleum products.

With the rise in international crude prices last month and the VAT still in limbo but in force, the regulator may not have good news for Kenyans.

ERC’s pricing Friday is clouded in uncertainty with a contempt proceeding on its doorstep for failing to respect a Bungoma High Court order by Justice Stephen Riech quashing the implementation of the 16 per cent levy on petroleum products to enable the President to either assent to or reject the amended Finance Bill passed by the National Assembly.

The dilemma is heightened by the silence from State House with the long wait for President Uhuru Kenyatta who had been out of the country when the VAT kicked in and whose signature the court battle is pegged on.

SIGN INTO LAW

ODM leader Raila Odinga had even assured the public on September 3 that the president would sign into law the amendments to the 16 per cent VAT on petroleum products passed by Parliament.

Wednesday, government spokesperson Erick Kiraithe’s newspaper commentary that the president is yet to receive the bill pushing the tax by two years paints an even grimmer picture over the fuel tax stalemate.

In Kisumu, ERC sent lawyers in court in a bid to push for the setting aside of the court order, an odd scenario since the regulator has always insisted on not having been served by the same orders they are seeking to squash.

“The matter is coming up for further directions on Monday but for us we are puzzled by how a government agency can disobey a court order and then come before court to try and set it aside. They ought to have complied first, that is the law,” Lawyer Ken Ken Amondi, of Amondi and Company Advocates who represented the Sumawe Youth Group in the case told Nation.

INCREASING COSTS

Another oddity facing Friday’s price revisions is the increasing costs for crude oil through the month of August which will be key in determining the pump prices since landed cost is a key component of the monthly price revisions.

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