The High Court in Nairobi has ordered the government not to sell cooking oil imported into the country by the Ministry of Trade and Industry.
Justice John Chigiti ordered the government to hold on until the dispute filed by the Law Society of Kenya (LSK) is heard and determined.
The judge directed the government and the lawyers' lobby to file their submissions within the next 14 days and appear before him on July 26, 2023, for further directions.
In Parliament, Trade Cabinet Secretary Moses Kuria told Senators that the oil had already been distributed.
However, in court, the Kenya National Trading Corporation (KNTC) argued that they had not started distributing the oil.
Justice Chigiti observed that at the heart of the case was whether the government's administrative process to import cooking oil can pass the legal test.
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"There is a need, therefore, to prevent the implementation and or further implementation of the said decision until the legality of the respondent's administrative action and decision is established, in light of the case pleaded by the Applicant. It is my view, therefore, that the order of stay ought to issue," said Justice Chigiti.
In the case, LSK argued that the government is killing edible oil businesses in Kenya. The lawyers' lobby argued that President William Ruto administration's decision to import cheaper edible oil will in effect lead to the shutdown of local factories that are paying high taxes to produce the same oil.
According to LSK's lawyer Denis Odero, it is ironic and absurd for the government to hike the cost of electricity and Value Added Tax on locally manufactured products while running abroad to source similar products duty-free.
Odero told the Judge Kenya has no state of emergency or severe shortage to warrant importation of duty-free cooking oil as the same is readily available from local producers.
While faulting the process through which the government sourced for 125,000 tonnes of cooking oil, LSK argued that Kenyans who work in the firms will lose their jobs, which it said is contrary to its promise to create jobs in the country.
"The respondents have not demonstrated that the country lacks edible oil, or that manufacturers are unable to meet the demand for edible oil in the country. In effect, the duty-free importation of finished edible oils into the Kenyan market will drive edible oil manufacturers in Kenya out of business," argued Odero.
He stated that the government has failed to control the prices of essential commodities locally in order to secure their availability at reasonable prices. LSK also argued that the government proceeded without consulting or involving edible oil manufacturers in Kenya.
It was of the view that manufacturers have the capacity to supply edible oils to the public at the same government-sanctioned subsidised prices if the same tax treatment were afforded or extended to them.
On the other hand, Treasury Cabinet Secretary Njuguna Ndung'u defended the government's decision to import the cooking oil.
Prof. Ndung'u in his reply stated that the Cabinet allowed KNTC to import oil, beans and rice as the country was experiencing the effects of prolonged drought.
Although the government had not declared the drought ravaging the country a calamity, Ndung'u in his court papers claimed that the Kenya Kwanza's administration intervention was prompted by a national disaster to seek for the commodities outside Kenya.
He also claimed that the price of oil, rice, beans had escalated and was unaffordable to Kenyans, therefore it was necessary to import.
"The government has a responsibility of taking action in order to cushion the citizens," he argued, adding that the idea was to have reasonable prices at the shelves.