More pain at the pump ahead of festive month as petrol prices rise

Peter Mikisi a petrol station attendant in Nakuru fuels a car on January 15,2015.PHOTO:KIPSANG JOSEPH

Increased prices of crude oil in the month of October have dealt a major blow to motorists. This is after prices of kerosene and petrol rose by Sh3.45 and Sh3.38 respectively in the latest review by the regulator.

According to Energy Regulatory Commission (ERC), the price of free on board Murban crude oil increased by 12.86 per cent to $51.35 (Sh5,225) per barrel, being the first time in 16 months a barrel of crude oil has gone above $50 (Sh5,085).

Due to this, motorists in Nairobi will now pay Sh94.94 for a litre of petrol while for kerosene, a popular source of energy for most households, will cost up to Sh62.16. For diesel, which had a marginal rise of Sh0.05 per litre, consumers within Nairobi will get it at Sh82.17.

 TIME LAG

Usually there is a time lag of up to 45 days from the time of order and delivery meaning that the October impact will now be felt in this latest review that will run up to mid-December.

“For this month, a majority of cargoes used in the super petrol and kerosene pricing were October 2016 cargoes. Accordingly, in line with increase in landed costs, the local pump prices for the two products has been impacted,” said ERC in a statement.

In the period under review, average price of imported super petrol increased by 8.12 per cent from $479.33 (Sh48,729) per tonne in September to $518.23 (Sh52,684) in October.

During a similar timeline, average price of imported kerosene rose by 10.68 per cent to $479.30 (Sh48,726) per tonne, up from $433.07 (Sh44,026). For diesel, it rose by less than a dollar from $433.40 (Sh44,059) to $435.40 (Sh44,263).

The shilling maintained a fairly stable run against the US dollar at 101.39 compared to 101.28 in the month of September. In the statement signed by ERC Director General Eng Joseph Ng’ang’a, residents in Mombasa will now pay Sh91.53 for a litre of petrol. For a similar quantity of diesel, they will part with Sh78.79 while kerosene will retail at a maximum of Sh59.31.

In contrast, petroleum products in Mandera, the town that is furthest from the port of Mombasa, will cost consumers Sh108.75 for a litre of super petrol. Getting a similar amount of diesel will be Sh95.98 while kerosene will retail at Sh75.97.

LEAST TAXED

In Nakuru, oil marketers will have to compete up to Sh95.70 to sell a litre of petrol while for diesel, they will not be allowed to exceed Sh83.12. Kerosene will be priced up to Sh63.04.

 In Eldoret, a litre of petrol will retail at Sh96.88 while in Kakamega it will be relatively higher at Sh97.02. Getting a litre of diesel in Eldoret will be Sh84.30 against Kakamega’s Sh84.44.

Taxes and levies remain a major component in ERC’s pricing formula. In Nairobi, for instance, the Government will collect Sh38.98 on every litre of super petrol sold while on diesel it will take Sh29.35.

For kerosene, the least taxed, a litre sold will see government take Sh8.21. Importers and dealers take Sh10.89 on each of the three petroleum products sold in Nairobi.

In subsequent pricing, consumers may get a relief with crude oil prices being reported at three month low of about $44.73 (Sh4,547) per barrel.

Uncertainty still looms over whether or not the world’s largest cartel – OPEC,the Organization of Petroleum Exporting Countries representing 13 major oil producing nations, will cut the supply of oil to stabilise the price.