FILE PHOTO | NMG
Last week, the petroleum regulator announced huge petroleum consumer price cuts, a welcome blessing to those Kenyans who can still make good use of the cheap oil in these times of restricted travel.
The decreases were aggravated by a major oil supply glut, caused by diminished global oil demands as a result of Covid-19 pandemic.
In declining to intervene, the ministry correctly explained that consumer oil prices are calculated using a legal process which cannot be changed every time supply chain changes negatively impact an interested party.
When the government re-introduced petroleum pricing regulations in 2010, it was to reign in cases of market abuses and arbitrariness by oil companies - practices that had prevailed since the early 1990s when IMF rushed Kenya into adopting a free market economy.
In the ongoing unusual Covid-19 situation, there will be specific unpredictable business losses by oil marketers, which cannot be guaranteed for recovery or compensation by the pricing formula.
