The Government escalated its battle with oil companies on Tuesday announcing that plans for price controls were being worked out by the regulator.

Energy minister Kiraitu Murungi said the companies were operating as cartels and had failed to reduce their prices to reflect the falling international prices.

Speaking during the opening of the National Energy Conference at Kenyatta International Conference Centre, Mr Murungi said he had directed the Energy Regulatory Commission to work out a price control mechanism to deal with oil firms that persisted in charging exorbitant prices.

"I have asked the Energy Regulatory Commission to advise me on the modalities of introducing a price control mechanism based on a margin of international crude oil prices among other legal mechanisms, " Mr Murungi said.

The minister however did not say when the price controls would be introduced.

Mr Kiraitu accused transnational oil companies trading in Kenya of unjustly benefiting.

"We cannot allow this unjust profiteering by oil companies. As a government, it is our duty to protect Kenyans from exploitation by these cartels," he said.

Two weeks ago the minister introduced a price tracking system and enlisted the media's help in highlighting the prices the companies were charging to help consumers boycott those which charged high prices.

Mr Kiraitu has been demanding the oil companies lower the pump prices by Sh10 but most have reduced by between Sh4 and Sh6, claiming that they were clearing stocks bought when international prices were much higher.

Global prices of crude oil have fallen from all time high of $147 a barrel reached in July to $97 in September.

Mr Murungi said the National Oil Corporation would be expanded to play its role of price stabilisation.