Why increasing prices of charcoal could land one in jail

There was a time in Kenya when increasing the price of any commodity without State permission was the gravest crime a trader could ever commit.

One could be jailed for the ‘crime’. Hawk-eyed Price Control Inspectors monitored the amount charged on basic commodities to protect Kenyans from unscrupulous traders.

During the late 1970s, charcoal dealers in the country were closing shop following massive arrests by the inspectors and ballooning wholesale prices of the commodity.

The dealers complained that they bought the charcoal at exorbitant prices and could barely eke out a living if they sold the fuel at the recommended Government price.

There was also a shortage of the commodity that former President Mwai Kibaki, then Minister for Finance and Planning, blamed it on heavy rains that were pounding the country at the time.

In 1978, the price of a bag of charcoal was gazetted at Sh18 while wholesalers bought the same at Sh15. “The situation is serious and we are closing down completely. We shan’t operate again until the government works out a fair system in which no one suffers,” said Andrew Mbogo a charcoal dealer in Nairobi.

Media reports said that former charcoal dealers in Nairobi were trooping to Industrial Area for jobs while others had taken their families back to their rural homes.

“I have just come from the Industrial Area where I was prepared to even take the lowest paying job in order to save my family, but nobody seems to be interested in me,” said Mr Mbogo. Wholesalers too vowed to quit the trade and turn to other profitable ventures such as transporting potatoes and cement to the countryside.

They complained that not only had charcoal prices skyrocketed, but they were also paying heavy levies to the Government, pushing up their costs.

The East African Standard reported that dealers who decided to venture into other businesses with their savings found the going tough as their licences covered only the sale of charcoal in the city.

James Kariuki, a wholesaler, was quoted by the East African Standard as saying that bought a bag of charcoal at Sh15 up-country and had to pay a levy of Sh2 per bag plus transportation costs.

Port authorities, police and customs officials had also been warned not to accept charcoal as cargo for export.

The Coast Provincial Commissioner Eliud Mahihu warned that a ban on exporting the commodity a few years ago was still in effect.

Mangrove trees

Some traders thought the ban had been relaxed and had resumed felling of mangrove trees in Lamu for charcoal production

The courts too were harsh on traders who hiked charcoal prices. Four men were fined Sh21,000 for selling their charcoal at exorbitant prices.

Chief Magistrate F F Abdullah noted that there was a public outcry over prices charged by unscrupulous charcoal dealers “who are out to fleece the ordinary man.”

Abdullah said that the fuel was an important commodity and greed for cash was hurting ordinary Kenyans.

He warned that exceeding controlled prices was a serious offence which could land them in jail for two years or a heavy fine.

The four dealers told the court that they were making thin profit margins as they had bought a bag at Sh25 from wholesalers.

Abdullah replied that if the dealers had refused to buy from their suppliers at such high prices wholesalers would with no doubt “come down to earth.”

They were selling at almost double the gazetted price. The chief magistrate said that Kenyans must be protected from the city’s unscrupulous charcoal dealers who were “exploiting them daily.”

The dealers had also presented their case to the Ministry of Finance and Planning in a bid to raise the price. Former President Mwai Kibaki, then Finance Minister, had said in Parliament that the dealers should initiate discussions with the Ministry if they felt that they deserved the prices needed to be increased.

He said that though the ministry wanted to do away with price controls for charcoal, there were fears that “under the present circumstances this would result in exploitation of wananchi.”

“What we do not want is for someone to make his own laws on the prices of charcoal,” he said.

The finance minister said that it was “common knowledge” that the shortage of charcoal was due to the heavy rains.