Pump prices relief as government retains subsidy
The Energy and Petroleum Regulatory Authority had in June 14, 2022 announced a Sh9 rise in fuel prices in its monthly review.
The Energy and Petroleum Regulatory Authority (Epra) has kept fuel prices unchanged for the third month in a row after the government extended the fuel subsidy that has cushioned consumers from skyrocketing prices.
Epra Director-General Daniel Kiptoo said the cost of a litre of petrol will retail at Sh159.12, diesel at Sh140 per litre and kerosene at Sh127.94.
“In accordance with Section 101(y) of the Petroleum Act 2019, Legal Notice No.196 of 2010 and Legal Notice No. 26 of 2012, Epra has calculated the maximum retail prices of petroleum products for the period August 14 to September 14 2022,” he said in a statement.
“In the period under review, the pump prices of super petrol, diesel and kerosene remain unchanged.”
The subsidy is the second in a row and is a timely reprieve to consumers who would have been hit with record high fuel prices following the increase in the cost of imports.
The landed cost of a cubic-meter of petrol rose by 2.99 per cent between June and July, that of diesel increased by 8.22 per cent while that of kerosene rose by 14.9 per cent for the same quantity.
This forced the state to intervene with a subsidy of Sh54.91 for each litre of petrol, Sh66.17 for diesel and Sh74.17 for kerosene.
Epra said the commodities would have cost Sh214.03, Sh206.17 and Sh202.11 per litre, respectively, without the subsidy.
“The government will utilise the Petroleum Development Levy to cushion consumers from the otherwise high prices,” said Epra.
This is the second time in a row that the government has applied the subsidy after withdrawing it for three months hitting consumers with high fuel costs.
The government has planned to gradually withdraw the subsidy to reduce the burden of funding the programme from the exchequer.
It is seeking to constitute a task force that will guide the National Treasury on how to gradually eliminate the fuel subsidy within the next few months to ease pressure on public coffers amid rising global fuel prices.
The Treasury has asked the International Monetary Fund’s (IMF) approval to review the fuel pricing mechanism and to set up the task force that will be charged with weaning off consumers from reliance on subsidised fuel.
The government has already began gradually withdrawing the subsidy by allocating just Sh5 billion for fuel subsidy in the current financial year.
This is Sh26.7 billion less than the Sh31.7 billion that the state spent on cushioning Kenyans from high fuel prices in the past fiscal year.
“We would like to request that the IMF Executive Board approve review of application of domestic fuel pricing mechanism and publicly announce and constitute a task force to oversee the progressive elimination of the fuel subsidy within the first half of FY2022/23 and to ensure that fuel pricing actions are at all times aligned to the approved budget,” stated the Treasury.
President Uhuru Kenyatta last month set aside Sh16.67 billion that was used to subsidise fuel prices for the July-August cycle.
