Consumers to pay more for petrol, kerosene

Motorists will dig deeper into their pockets to keep their cars moving following a raise in petrol prices by Sh3.38 a litre on rising global prices.

Kerosene, which is mainly used by low-income households for lighting and cooking, also went up by Sh3.45 to Sh62.16 a litre in Nairobi.

Nairobi motorists will for the next one month pay Sh94.94 per litre of petrol at the pump from Sh91.56 in the latest monthly price review by the Energy Regulatory Commission (ERC).

Diesel, mainly used to run trucks, buses and tractors, is up marginally by Sh0.05 to Sh82.17 a litre in the capital city.

“September-October crude prices went up so did the landed costs,” said ERC acting director of petroleum Edward Kinyua in a statement.
“Majority of the super petrol and kerosene cargoes were procured in October,” he added.

Kenya bought its current petrol stocks when crude prices had jumped to $51.35 a barrel (159 litres) in October, up from $45.50 a month earlier, explaining the faster rise in pump price.

The country experiences a lag of between 30 and 45 days from when it places supply orders and actual delivery of new petroleum stock at the Mombasa port.

Diesel, however, recorded slower rise since the bulk of the stock was bought in September when global prices were lower ($45.50 a barrel).

Kenyans consume an average of 130 million litres of petrol monthly while diesel use stands at an average of 200 million litres per month.

This means the price increments will cost consumers about Sh449 million in the period to December 14 when the energy regulator reviews the prices again.

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Kenya now purely depends on imports for its monthly petroleum needs after its sole refinery, the Kenya Petroleum Refineries Ltd, was shut down in September 2013.

Petroleum prices vary across Kenya depending on the cost of transporting it from the Mombasa port where the imported consignments land and are stored.

Mombasa consumers, therefore, enjoy the lowest retail prices at Sh91.53 a litre for petrol and Sh78.79 for diesel.

Fuel prices are also determined by forex exchange. The shilling has held steady against the US dollar at Sh101 since the beginning of the year.

The ERC started controlling fuel prices six years ago to shield customers from wild swings in local prices that were often out of sync with global prices.

Petroleum prices have a bearing on inflation, which hit an eight-month high of 6.47 per cent last month from 6.34 per cent in September.

Producers and transporters often respond to the cost movements by adjusting retail prices of their products and services.