Relief for consumers as fuel prices remain unchanged 

Consumers have been handed a relief after the energy regulator on Sunday maintained the current fuel prices for the next month. 

This is a boost for consumers ahead of the busy festive season, as the Energy and Petroleum Regulatory Authority (Epra) retained the fuel subsidy that was reinstated last month to cushion from a further increase in the cost of fuel. 

Epra last month reinstated the fuel subsidy after immense public pressure over the high cost of living which saw petrol and diesel prices reduce by Sh5 while kerosene prices fell by Sh7.28 per litre. 

This will see motorists in Nairobi continue to pay Sh129.72 for a litre of petrol, Sh110.6 for diesel and Sh103.54 for kerosene.  

“In the period under review, the pump prices of super petrol, diesel and kerosene remain unchanged,” the energy regulator said. 

“The prices are inclusive of the 8 per cent Value Added Tax (VAT) in line with the provisions of the Finance Act, 2018, the Tax Laws (Amendment) Act, 2020 and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020,” Epra said. 

Motorists in Mombasa will continue to pay Sh127.46 per litre of petrol, Sh108.36 for diesel and Sh101.29 for kerosene while those in Kisumu will pay Sh130.12, Sh111.3 and Sh104.26 for petrol, diesel and kerosene respectively.

Fall in fuel prices

Meanwhile, petrol will retail at Sh129.24 in Nakuru, Sh110.43 for diesel and Sh103.39 for kerosene, while motorists in Eldoret will pay Sh130.13, Sh111.32 and Sh104.27 for the three products respectively.

The cut in supplier margins will see the oil marketing companies be reimbursed from the Petroleum Development Levy Fund (PDLF), which is funded by the Petroleum Development Levy (PDL) that was increased to Sh5.40 per litre of petrol and diesel last year from Sh0.40. 

Meanwhile, consumers could see a fall in fuel prices in the coming months should lawmakers pass a Bill that recommends reduction of taxes and levies on the product.

Through the Petroleum Products (Taxes and Levies) (Amendment) Bill, 2021 that is in public participation, Members of Parliament (MPs) seek to lower taxes on fuel and cut suppliers margins.  

Through the bill, MPs want a reduction of the PDL to Sh2.9 after revoking the Petroleum Development Levy Order, 2020 and amending the Petroleum Development Fund Act, 1991 to provide the amount that shall be charged for the levy.

The MPs also want to have final say on use of the PDL, with the National Treasury coming under pressure for admitting that it misallocated Sh18.1 billion from the kitty for use in upgrade of infrastructure facilities, drying the fund of monies to stabilise fuel prices in last month’s review.

Boost for consumers

The lawmakers have also proposed a reduction of VAT on fuel from 8 per cent to 4 per cent, which would also significantly reduce fuel prices.

Meanwhile, the MPs also want the oil marketers’ margin cut by Sh3 per litre through amendment of the Energy (Petroleum Pricing) Regulations, 2010.

Fuel is a key component among the basket of goods used to measure inflation and its use cuts across most sectors of the economy including transport, agriculture and electricity generation. 

The fuel prices will be a double boost for consumers after Epra reduced electricity prices for this month on Friday following a downward review of the currency fluctuation component of the power bill.  

The energy regulator reduced the foreign exchange rate fluctuation adjustment (FERFA) by 30 cents to 73.42 cents per unit down from Sh1.03 per unit last month.

This means that the increase of the fuel component of the power bill to Sh4.21 per unit, the highest since July 2018 when it hit Sh4.60 due to rising fuel prices by Epra was fully cancelled out, relieving Kenyans from higher power charges this month. 

Epra increased the electricity fuel cost charge (FCC) by 24 cents from Sh3.97 last month, making it the fourth month in a row it has risen due to higher diesel costs as increased demand has pushed up the prices of global crude oil prices.

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