Energy Regulatory Commission wins battle to regulate oil sector

Kenya Power Managing Director Ken Tarus (left) and ERC Director General Pavel Robert Oimeke when they appeared before the Energy Committee in May. [Boniface Okendo,Standard]

The Energy Regulatory Commission will continue overseeing the retail petroleum sector, fending off attempts to hive off its powers to regulate the transportation, storage, and sale of refined products in Kenya.

Some lawmakers and civil society groups had proposed that a new regulator oversee the retail petroleum business as well as the fledgling oil and gas sector.

Taking away petroleum regulation from ERC would have cleared the confusion caused by its reporting to the ministries of Energy and Petroleum – unlike the norm where regulators report to one ministry.

In the new Energy Bill, ERC, which has been renamed the Energy and Petroleum Regulatory Authority, ERC will regulate electricity and petroleum industries with the exception of crude oil, which would be regulated by the Upstream Petroleum Regulatory Authority proposed in the Petroleum Bill.

The Energy Bill was taken to through public participation last week. It is now at the Senate, having sailed through the National Assembly.

ERC Director General Pavel Oimeke opposed the splitting up of ERC’s functions, citing high costs involved and duplication of roles.

“At least for now, we can have one regulator for electricity and petroleum because of the costs to the exchequer. If we were to form another regulator to deal with petroleum separately from electricity, it would not be good for the country and other than costs, it will also mean duplication of roles,” he said when he met the committee last week.

“Let us maintain one regulator. If the time comes when we need different entities, then it can be done.”

Earlier, the Energy Committee had recommended the removal of all petroleum aspects under ERC and instead placing them under the planned petroleum regulator.

The Kenya Civil Society Platform on Oil and Gas in its submissions to the Senate Committee on Energy on Thursday noted that reporting to different ministries could complicate matters for ERC in the issuance of licences and monitoring of players.

The lobby wanted the petroleum functions transferred to the Petroleum Bill under the proposed oil and gas regulator.