Epra raises fuel transport and storage charges

The new rates, set by the energy regulator, are part of the three-year cycle which started in July 2022, in a bid to offer KPC higher revenues from handling local and transit fuel.

Higher tariffs did not impact pump prices in the monthly pricing schedule announced on July 14, mainly due to the drop in landed costs of fuel. However, the impact of the higher tariffs is likely to be felt if the landed costs rise in the coming months.

The price of diesel fell by Sh1.50 to Sh171.6 per litre in Nairobi while that of petrol dropped by Sh1.50 to Sh188.84 per litre in the capital.
Landed costs of petrol fell by 4.65 percent to $716.03 (Sh94,717 at current exchange rates) per cubic metre while that of diesel dropped 1.19 percent to $682.73 (Sh90,312) for the same quantity.

Read: KPC on the spot for Sh1bn payouts to defunct KPRL

The new tariffs also include a rise in depot charges for fuel meant for the local market. Eldoret depot recorded the highest rise of Sh305.81 to Sh4,175.37 per cubic metre. The Konza depot recorded the smallest rise at Sh106.75 per cubic metre to Sh1,527.48.

Nakuru posted the biggest rise in storage charges for transit fuel with a rise of $2.77 per cubic metre to $37.83.

Storage charges for transit fuel at the Eldoret and Kisumu depots rose by $2.77 per cubic metre to $37.83 and $37.79 per cubic metre respectively.

Any upward review of pricing components directly impacts pump prices, but this can be undone by higher drops in the landed costs of fuel, the way it happened in the current pump prices that are in force until August 14.

The new transport and storage charges mark the end of a three-year tariff that came into effect from July 2022, as Kenya Pipeline sought to raise more revenue from oil marketers both in the Kenyan and regional markets.

New tariffs are likely to come into force from July next year, but this will be pegged on KPC submitting a proposal to the Energy and Petroleum Authority for consideration.

Higher charges for use of KPC’s infrastructure coupled with increased demand for fuel are key to driving the revenues of the State entity.

For example, in the year to June 2023, throughput along KPC’s system grew six percent to 8,675,034 cubic metres compared to 8,183,995 cubic metres a year earlier. This was one of the factors that pushed KPC’s pre-tax profit by 22.9 percent to Sh7.5 billion in the period.

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Editor’s note: We have revised the headline to replace KPC with Epra. Epra is mandated to set the tariffs and not Kenya Pipeline as earlier indicated.