Economy

ERC revises fuel price caps for first time since 2010

fuel

Mainstream dealers in Lamu have stopped selling fuel. FILE PHOTO | NMG

The Energy Regulatory Commission (ERC) has bowed to pressure and agreed to review fuel price caps for Lamu upwards following dealers’ boycott that sent a litre of petrol to Sh260.

Mainstream dealers in recent days stopped selling fuel because the price caps set by the energy regulator have seen them run into losses.

This has forced middlemen, who are not under the watch of the ERC, sell a litre of petrol at between Sh200 and Sh260.

On Monday, the ERC agreed to review the maximum selling price of fuel in Lamu and said a higher interim pricing will introduced this week until the July 14 when a permanent structure will be in place.

“We are moving to review transport costs factor in pump prices in Lamu to enable oil marketers make a return on their investment,” said Pavel Oimeke, the acting Director General at the ERC. “It is true they are being under-compensated when you factor that transport costs from Mombasa. This will only affect Lamu.”

ERC has been setting the price of petrol, diesel and kerosene since 2010. The regulator sets prices for various regions of the country monthly.

READ: Lamu brokers sell litre of petrol at Sh260 as shortage bites

A litre of petrol should trade at a maximum of Sh99.43 in Lamu, Sh98.73 in Nairobi, Sh95.47 (Mombasa) and Sh100.72 in Kisumu, according to the latest fixtures.

The review means Lamu residents will pay more for fuel.

“A person convicted of retailing petroleum products above the maximum levels will be liable to a fine not exceeding Sh1 million, or the withdrawal of their operating licence or both,” says the ERC.

This warning saw mainstream players keep off selling fuel. Mpeketoni town has four stations but all are not selling fuel.

Boda boda operators and motorists operating in Lamu, known for agricultural products and as a business hub in the region, are the most affected.
Commuters have been hard hit with fares rising steeply.