Fuel prices have hit historic highs after the state discontinued a subsidy scheme it had reintroduced six months ago.
The Energy and Petroleum Regulatory Authority (Epra) said the increase came on the back of rising global crude costs on petrol and diesel.
This increased the price of petrol by Sh5 a litre in Nairobi to Sh134.72 while diesel has jumped Sh5 to Sh115.6 a litre.
High prices last year forced the state to introduce a subsidy scheme in October to diffuse public outrage over the high cost of living.
The price of kerosene, mostly used in low-income households, was maintained at Sh103.54 per litre.
“The prices are inclusive of the eight percent 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 in a statement.
The fuel subsidy scheme which is supported by billions of shillings raised from fuel consumers through the Petroleum Development Levy had kept pump prices unchanged for five months.
The government has been implementing the stabilisation programme since April 2021 following a surge in global crude oil prices on the back of increased demand.
The levy cushions consumers from volatility in fuel prices but the sharp rally in crude oil prices in recent months has depleted the fund.
The regulator had kept fuel prices unchanged since October at Sh129.72 and Sh110.60 a litre for petrol and diesel respectively on fears an upward review could fuel public anger.
Last month, Ministry of Petroleum Principal Secretary Andrew Kamau told Members of Parliament that the Petroleum Development Levy Fund (PDLF) that the state draws from to compensate oil marketing companies has only Sh1.2 billion left as at February 11.
Mr Kamau further told the MPs that the Sh24.73 billion the ministry has been allocated to keep fuel prices stable in the supplementary budget is not a fresh allocation as it was allocated in June and has already been spent.
