More pain at the pump as fuel prices hit new highs
Energy CS Davies Chirchir with EPRA Director General Daniel Kiptoo brief the media at Kawi House on Saturday.
Fuel prices will hit new highs from midnight despite the government dipping into the stabilisation fund for the first time since August to provide a Sh1.76 billion cushion to avert a steeper price rise.
The Energy and Petroleum Regulatory Authority (Epra) raised petrol prices by Sh5.72 per litre, diesel by Sh4.48 and kerosene by Sh2.45.
This means that in Nairobi, petrol will be sold at a record Sh217.36 per litre, diesel at Sh205.47 and kerosene at Sh205.06. In Mombasa, the three products will retail at Sh214.3, Sh202.41 and Sh201.99 respectively.
This is a significant increase from the current prices where petrol sells at Sh211.64 per litre in Nairobi, diesel at Sh200.99 and kerosene at Sh202.61.
The new prices come after the government imposed a stabilisation of Sh3.07 per litre for petrol, Sh11.64 for diesel and Sh9.6 for kerosene, totalling Sh1.76 billion.
Without stabilisation
The money will come from the Petroleum Development Levy Fund (PDLF), which is levied at Sh5.40 per litre of petrol and diesel.
This means that without the stabilisation, petrol would have retailed at Sh220.43 per litre in Nairobi, diesel at Sh217.11 and kerosene at Sh214.66.
“Taking into account the weighted average cost of imported petroleum products, the changes in the maximum allowed petroleum pump prices in Nairobi are as follows: super petrol increases by Sh5.72 per litre, diesel increases by Sh4.48 per litre and kerosene increases by Sh2.45 per litre,” said Epra in a statement.
Energy Cabinet Secretary Davis Chirchir said Cabinet last week gave the go-ahead for use of the PDLF kitty to help stabilise prices amid an increase in global prices and a weak shilling.
Epra data shows that the landed cost of petrol rose by 3.93 per cent last month, diesel by 7.07 per cent and kerosene by 5.01 per cent.
“The government made the decision to stabilise the price of diesel by the largest margin because it plays a major role in the cost of living as it is applied in various uses including transport, electricity generation and farming,” said CS Chirchir.
Refineries in the Middle East shut down
“Global prices of fuel have increased in recent months due to numerous factors. We have seen refineries in the Middle East shut down for maintenance, the Russia-Ukraine conflict has had a negative effect on the fuel supply chain and we have also seen a cut in production by OPEC countries,” said the CS.
This is the second monthly increase in fuel prices, which will further squeeze households and businesses already reeling under the high cost of living.
Last month, Epra increased the price of petrol by Sh16.96 per litre, diesel by Sh21.32 and kerosene by Sh33.13.
This came as the government lauded the impact of the government-to-government fuel import deal under which Kenya has been importing fuel from Saudi Arabia and the United Arab Emirates (UAE) on a six-month credit.
Mr Chirchir said the deal had slowed the depreciation of the Kenyan shilling by eliminating spot purchases of US dollars by oil marketing companies.
“What used to happen is that oil marketing companies would all go to the market at once to source for dollars to pay for their fuel cargoes. But now, these dollar purchases are made over time, which has slowed down the depreciation of our currency,” he said.
However, Kenyans will be wary of the impact of the latest fuel price hike, which comes a month after stakeholders in various industries warned of the dire consequences.
Last month, Public Service Vehicle (PSV) operators increased fares by up to 20 per cent on all routes immediately following the fuel price hike.
“We all know that when the fuel goes up, we will have to pass it to the common mwananchi. We will have to increase the cost of our products so that we do not lose business,” said Matatu Owners Association (MOA) chairman Albert Karakacha.
The Kenya Transporters Association (KTA), Kenya Long Distance Truck Drivers Union (KLDTDU) and truck owners also warned that the government could lose revenue as the cost of fuel will directly affect business at the port of Mombasa.
