A petrol station attendant serves a customer in Nairobi. PHOTO | FILE
What you need to know:
ERC has reduced petrol price, used to run private cars, by Sh2.14 per litre to Sh86.50 a litre, blaming the out of tune drop on taxes.
Private car owners have little to celebrate after the energy sector regulator once again failed to pass on the benefits of plunging global crude oil prices and a stable shilling by cutting petrol price by a small margin.
The Energy Regulatory Commission (ERC) reduced petrol price, used to run private cars, by Sh2.14 per litre to Sh86.50 a litre, blaming the out of tune drop on taxes.
However, the price of diesel was reduced by Sh8.82 per litre to Sh67.88 a litre in Nairobi, bringing cheer to matatu operators, farmers and manufacturers who mainly use the fuel.
Kerosene, used by poor households for lighting and cooking, will now retail at Sh39.62 per litre in the capital city, reflecting a drop of Sh6.51 per litre per litre.
The pump prices will be in place for the next one month beginning Monday. Kenya bought its current petroleum stocks in January and Sunday’s fuel review came at a time when Brent crude prices have touched a 12-year low of $29.96 per barrel, down from $36.50 in mid-December.
“It is also important to note that the pump price of super petrol has higher taxes and levies compared to diesel and kerosene,” said ERC director-general Joe Ng’ang’a.
“The drop in crude oil prices does influence local pump prices but the relationship between the two is not linear because various factors affect the final price of refined products. Those factors include the demand and supply of specific refined products in the world,” he said.
ERC said the import cost of super petrol fell 4.22 per cent per tonne in the consignment bought last month, while diesel and kerosene dipped by a fifth.
The World Bank, legislators and the Consumer Federation of Kenya (Cofek) have consistently faulted ERC for marginal fuel price cuts despite oil prices being on a free fall in the global markets.
Kenya’s cost of living is expected to significantly go up in September when value added tax (VAT) is introduced on kerosene, petrol, jet fuel and white spirit – resulting in a fresh round of retail price inflation as a result of higher energy prices that will impact on costs of production, transport and electricity.
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