A parliamentary committee established to investigate the spiraling cost of living that has put pressure on consumers has proposed a raft of measures but cautioned against price controls.

The MPs proposed measures to rein in oil cartels, lobbied the Government to reduce taxes imposed on diesel and zero-rate kerosene and urged the introduction of targeted social welfare programmes.

In a report tabled in the House on Tuesday, the Parliamentary Select Committee on Cost of Living, however, urges caution in the enforcement of the Price Control (Essential Goods) Act so as to forestall distortion of the market and possible capital flight.

"Emphasis should be placed on making the supply chain of essential goods more efficient, smooth and cost effective," says the report.

It noted free market forces have opened up mobile telephony to ordinary Kenyans by suppressing prices, but the cost of fuel has been on a sharp upward spiral since the entry of the Energy Regulatory Commission (ERC).

Instead MPs want the Government to operationalise the Competition Act and establish an independent Competition Authority to curb cartels in the energy sector and act on commercial banks found to have abetted the depreciation of the shilling against the major currencies.

The Energy ministry could incorporate these penalties in regulations under the Energy Act, it adds.

Second oil jetty

MPs further called for investment in the establishment of a second oil jetty in Mombasa to eliminate extra costs arising from demurrage as oil ships wait to discharge at the single jetty available at Kipevu while also urgently overhauling Line 1 of the Kenya Pipeline from Mombasa to Nairobi as it has "outlived its useful life".

The committee wants the Government to write off bad debts owed to the Agricultural Finance Corporation through a Sh2 billion bailout and Parliament will steer Motions for the revival of Kenya Farmers Association and Kenya Cooperative Creameries.

The report proposes the speedy restructuring of the Kenya Petroleum Refineries Limited refinery to ensure its modernisation by 2015 to improve efficiency.

To stem the fall of the shilling, the report asks the Central Bank of Kenya, through its Monetary Policy Committee, to take immediate decisive intervention.

The report is scheduled to be debated by MPs.

Stories by Alex Ndegwa and Steve Mkawale