NAIROBI – The outcry over high cost of fuel that hit the roof last month has opened scrutiny on the open tender system (OTS) that Kenya uses to procure fuel.
On Thursday, MPs made sweeping proposals aimed at significantly reducing taxes and levies on fuel to lower the price of the commodity.
To further reduce the cost of fuel, Consumers Federation of Kenya (Cofek) has asked MPs to oversight the OTS.
The lobby wants OTS tenders to be publicly advertised to show the date of the contracts, the bidders, when the tenders were advertised, bids that were received and how they were evaluated.
Additionally, it wants the sizes of the cargo to be shipped in also made public, the past winners of the tenders since 2005, respective storage capacities of the bidders and the beneficial owners of the bidding companies.
Cofek wants MPs to order the Ministry of Petroleum to open up the OTS to all marketing companies not just in Kenya but also globally, and for the Competition Authority of Kenya to analyse the dominance of a clique of firms that have been winning the tenders.
“The purpose of the OTS was to ensure petroleum products, whose prices are regulated monthly in Kenya, remain competitive as per market conditions. However, the conduct of the activities of OTS, despite its name denoting “open”, remains opaque, shrouded in secrecy, and exhibits cartel-like behaviours, denying Kenyan consumers the benefits of competitive pricing,” Cofek secretary-general Stephen Mutoro petitioned Parliament.
“The current pricing mechanism does not make necessary disclosures on the procurement of fuel products, only making public a landed cost whose computation is not unambiguous as it includes demurrage and other charges such as shipping,” Mutoro said. – DAILY NATION, Kenya.