Once fuel prices went up last Thursday, petrol stations had the commodity flowing from their pumps the next day.
It is not difficult to explain how this happened after weeks of acute shortages that saw motorists queue at filling stations for hours to access the vital commodity.
At the end of the day, oil marketers want to profit, which explains why the increase in prices led to the sudden “reappearance” of fuel.
The availability of fuel, albeit at a higher price, was a “relief” for Kenyans. They looked relaxed in queues.
Let us not celebrate though; as long as the market is not allowed to do its work, expect such glitches in future.
- Act now to avert another full blown fuel crisis
- State moves to avert another fuel crisis, orders firms to cut exports
- Fuel shortage: Taxi operators worst hit
- Who is fooling whom as motorists stare at another major fuel crisis?
I might seem hard-nosed, but I lived through the price control regime and saw first-hand the shortages and the unintended consequences.
It was no different this time. Though petrol was going for Sh134.70 per litre as per the regulator’s pricing guide, you could get it for Sh200.
That was way above the equilibrium price of about Sh170 per litre. By not letting the market do its work, we pay higher than the market price.
The time and money wasted looking for fuel are more than the extra shillings we would pay if the price were set by the market.
That is why higher prices and availability are a relief for Kenyans. Why not free the prices and see what happens? We could be surprised!
Entrepreneurs made hay while the sun was shining. Some young men started hawking funnels for helping you fill up your tank if you ran out of fuel. Saw them in the city?
Others were bolder. They brought jerrycans to “help” drivers skip the queue. If you wanted a full jerrycan, you parted with an additional Sh300 and got to keep it.
You could also opt to “lease” it for Sh150. They charged Sh50 to use a funnel. Beating the queues needed skill.
There are two key lessons from the fuel crisis. One is that we can easily adapt to hard times. But that is not an excuse to make life hard for ourselves. The good thing about letting the market do its work is that you can’t blame anyone!
Two, the fuel shortage left no doubt that the government has business in business!
Three, profit is central in a market system. Where did fuel suddenly come from after prices went up?