Pump prices have dropped to the lowest level in 19 months to reflect lower import costs, in a move likely to further ease pressure on falling inflation.
Super petrol prices have fallen by the largest margin of Sh8.18 a litre since May 2020 to Sh180.66 in Nairobi while diesel and kerosene prices have dropped by Sh3.54 and Sh6.93 respectively, the Energy and Petroleum Regulatory Authority (Epra) announced.
Fuel prices have a big effect on inflation, which relies heavily on diesel for transport, power generation and agriculture, while kerosene is used in many households for cooking and lighting.
Inflation last month dropped to its lowest level since December 2012 at 3.6 per cent and keeps the cost of living measure within the government targets of between 2.5 per cent and 7.5 per cent in the medium term.
The regulator said the cost of importing refined fuel in September dropped compared with the previous month, with diesel and kerosene to retail at Sh168.06 and Sh151.39, respectively, in Nairobi for one month starting October 15.
“The average landed cost of imported super petrol decreased by 8.59 per cent, diesel decreased by 5.52 per cent while kerosene decreased by 6.73 per cent per cubic meter in September 2024 from August,” said Epra.
The regulator last month subsidised petrol by Sh0.83 a litre and Sh3.40 in August. Diesel users enjoyed bigger subsidies at Sh1.46 a litre last month and Sh5.20 in August.
The High Court froze the increment following a petition filed by a Mombasa resident citing lack of adequate public participation ahead of increasing the levy by Sh7 a litre.
Mombasa motorists will now purchase petrol, diesel, and kerosene at Sh177.42, 164.82, and 148.15, respectively.
Motorists in Nakuru will pay Sh179.87 for petrol, Sh167.63 for diesel, and Sh151.01 for kerosene.
In Eldoret, motorists will spend Sh180.68 on petrol, Sh168.45 on diesel, and Sh151.82 on kerosene.
However, some sections of the country will spend as much as between Sh183.78 and Sh194.66 on petrol.
Among these towns are Isiolo, Maua, Garissa, Marsabit, Liboi, Moyale, Dadaab, Wajir, Modogashe, and Mandera. Others are Mandera, Merti, North Horr, and Laisamis.
The government has in the past used a fuel subsidy to ease the pain of costly fuel on Kenyans but stopped the scheme last year due to budgetary disruptions.
Manufacturers, farmers and service providers factor the cost of fuel in setting prices for their goods and services. Power producers also consider fuel costs in what is passed to consumers through the Fuel Cost Charge.
The decrease in fuel prices is expected to have a positive ripple effect across various sectors of the economy. Reduced transportation costs should lead to lower prices for goods and services, easing inflationary pressure.
The manufacturing and agricultural sectors, heavily reliant on fuel for production and logistics, should benefit from reduced operating expenses.
Additionally, Kenya's grid relies on diesel and heavy fuel oil for about 10% of its electricity generation, and this decline is likely to reduce electricity tariffs, thus benefiting manufacturers using electricity for production to cut costs.
