Kenya posts cheapest fuel prices in East Africa region
A petrol station attendant fuels a car. The price of fuel in Kenya depends on the distance of a location from Mombasa port. PHOTO | FILE
What you need to know:
Nairobi is still a friendlier market than Uganda and Tanzania despite ERC’s failure to match local prices with fall in cost of global crude.
Fuel in the Kenyan capital costs KSh7.59 less than prices in Tanzania’s capital Dodoma and KSh9.13 lower than Kampala’s, Uganda.
Burundi and Rwanda, which rely on Mombasa and Dar seaports to import their fuels, have the highest costs in the region.
Kenya remains the East African market with the cheapest fuel after Sunday’s adjustments despite failure by the Energy Regulatory Commission (ERC) to match the drastic fall in global crude prices.
Data gathered by regional industry regulators show that at prevailing exchange rates, a litre of super petrol in Nairobi is KSh7.59 cheaper than prices in Tanzania’s capital Dodoma and KSh9.13 lower than Kampala’s, Uganda.
A litre of petrol in Tanzania, East Africa’s second largest economy after Kenya, retails at the equivalent of KSh109.60 (TSh2,085) compared to Uganda’s KSh111.14 (USh3,409) and Kenya’s at Sh102.01.
Burundi and Rwanda, which rely on Mombasa and Dar seaports to import their fuels, have the highest costs in the region.
The small margin of only KSh9.13 between Nairobi and Kampala, however, lifts the lid on price manoeuvres which take place in the region given that Uganda gets most of its oil through Kenya’s port, a distance of about 1,000km away.
ERC on Sunday, while announcing the latest fuel review, said the country’s prices have remained lower than neighbouring states since crude prices began falling.
Analysts have criticised the adjustments, arguing that despite crude prices declining 40 per cent in the past six months, domestic prices have dropped by narrow margins of between 6.9 per cent and 9.7 per cent.
Tanzania receives its oil cargo through Port of Dar es Salaam, while Mombasa port serves both Kenya and Uganda — a landlocked country.
Data from the Energy and Water Utilities Regulatory Authority — Tanzania’s sector regulator — shows that diesel sells at KSh103.25 a litre, which is KSh12.40 more than what Nairobi residents are paying.
Fuel accounts for a significant part of Kenya’s import bill, thus lower prices mean improvement of its negative current account.
A litre of diesel goes for KSh96.43 in Uganda, which is KSh5.58 higher than in Kenya.
The price of a litre of kerosene, which is mostly used by low-income households for cooking and lighting, is lower by KSh30.78 and KSh20.16 in Kenya compared to Tanzania and Uganda respectively.
ERC has in the past defended its credibility in setting fuel prices, assuring Kenyans that they reflect global prices of crude.
The regulator argues that global oil prices account for 60 per cent of the local retail prices.
Shipment, profit margins, taxes and other fixed charges account for the remaining 40 per cent.
The energy regulator also cites a time-lag between placing orders and actual delivery of oil by importers through the open tender system.
The price of fuel in Kenya depends on the distance of the location from Mombasa port, meaning prices are lower in the coastal towns. A litre of petrol in Mombasa costs KSh98.68, diesel KSh87.54 and kerosene KSh68.61.
This is lower compared to KSh105 for a litre of petrol in Malaba, at the Uganda border, and KSh94.11 for diesel. At Dar es Salaam port, a litre of petrol costs KSh106.50, diesel KSh100.20 and kerosene KSh99.10.
Falling pump price has helped ease inflation in Kenya’s economy, which depends heavily on diesel for transport, power generation and agriculture.
The country’s inflation eased to 6.09 per cent last month from a high of 8.36 per cent in August, helped by falling electricity, food and fuel prices.
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