Attorney General given seven-day ultimatum in fuel cross-subsidy suit

Wednesday, February 8th, 2023 01:42 | By
Attorney General nominee Justin Muturi. PHOTO/Courtesy.

The High Court has directed Attorney General Justin Muturi to file his response within seven days in a suit seeking orders to set aside the move by Energy Petroleum and Regulatory Authority (Epra) to impose cross-subsidy on the price of diesel with that of super petrol.

Mombasa High Court judge John Onyiego who certified the matter as urgent directed the AG to file his response to ease the hearing of the suit.

In the suit, a Mombasa-based lawyer Kevin  Ithagi listed as the petitioner has sued Epra, alongside Energy and petroleum Cabinet Secretary, Davis Chirchir, arguing that the act of cross “subsidisation” carried out by the respondents to cushion diesel consumers was unconstitutional and illegal.

Cushion customers

“The price of diesel has been cross-subsidised with that of super petrol while a subsidy of Sh25.13 has been maintained for kerosene in order to cushion customers from the otherwise high prices.The government will utilise the petroleum development levy to compensate oil marketing companies for the difference in cost,” he argued.

Ithagi further argues that the petitioners contend that the unilateral and unlawful decision by the respondent was made despite the unequivocal admission in the press release dated January 14 that indicated that the price of super petroleum had reduced.

“In the determination of the maximum retail price of the petroleum products,the respondent is required to adhere to the formula at regulation 7 of the petroleum pricing regulations 2022,”he said.

The petitioner has further argued that in line with the government policy shift, the respondent in a press release dated September 14 ended the fuel subsidy on super petrol but retained subsidies on diesel and Kerosene.

“Surprisingly the respondent in a press release dated October 14 last year and in blatant contravention of its mandate started a trend of cross-subsidisation of the price of diesel with that of super petrol whereby instead of calculating the price of super petrol as per the formula provided in the pricing regulations, they added an arbitrary mark up on the price of the petroleum products( stabilisation deficit),” he said.

He further informed the court that the respondents have been levying the stabilisation deficit for four months beginning October last year ,a move that has led to higher prices for super petrol.

“The  1st  respondent has violated Article 27 of the constitution of Kenya by offering a subsidy on diesel, to diesel consumers at the expense of super petrol users,the act has led to super petrol consumers having been denied a subsidy and on top they are forced to dig deeper into their pockets and subsidise the consumption  of diesel users,” he said.       

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