Judge declines push to stop Epra diesel subsidy

A fuel station. FILE PHOTO | NMG

The High Court has declined to suspend the decision by the Energy Petroleum Regulatory Authority (Epra) to cross-subsidise the price of diesel with that of super petrol, handing the energy regulator a reprieve in the policy shift.

Justice Olga Sewe said a prima facie case had not been made to warrant the issuance of temporary conservatory orders to suspend the decision.

The judge further said that she was not convinced by the contention that the cross-subsidy was not anchored in law.

Lawyer Kevin Ithagi, the petitioner, has sued Epra and Cabinet Secretary for Energy and Petroleum over the cross-subsidisation of the price of diesel with that of petrol.

Justice Sewe further ruled that there are reliefs provided for if the petitioner loses his petition and that the decision by the court weighs in favour of the public interest.

“There is no merit in the application (for conservatory orders) and it is dismissed,” said Justice Sewe in the March 30 ruling.

Epra had argued that subsidies on diesel pump prices were partly maintained based on the fact that the landed cost was yet to reduce.

It argued that the subsidies were maintained due adverse economic impact that continued pump price increases would have resulted in.

Through an affidavit of its director in charge of petroleum and gas Mr Edward Kinyua, it said that the subsidy implementation was aimed at cushioning consumers from inflationary pressure that could have resulted had price increases been effected.

Epra has since November last year used a cross-subsidisation strategy in which petrol consumers have spent billions of shillings to subsidise diesel buyers as the government attempted to stabilize fuel prices.

Mr Ithagi accuses Epra of abusing price regulations by cross-subsidisation the price of diesel with that of super petrol.

He says that Epra has violated the constitution by offering a subsidy on diesel at the expense of super petrol users who have to incur costs to subsidise diesel.

Mr Ithagi wants a declaration that the decision by Epra to impose cross-subsidy on the price of diesel with that of super petrol is illegal and unconstitutional.

According to the petitioner, in line with the government policy shift, Epra in its press release of September 14 last year ended fuel subsidies on super petrol but retained subsidies on diesel and kerosene.

He further says that in the press release of October 14 last year, in contravention of its mandate, Epra started cross-subsidisation of the price of diesel with that of super petrol.

The case will be mentioned on May 8 for directions.

→ [email protected]