Retail prices of petrol to go up piling pressure on consumers' budgets

Prices of super petrol, diesel and kerosene to go up in the next 30 days. Photo:Courtesy

Kenyans will dig deeper into their pockets for petroleum products, piling pressure on their waning spending power.

Energy Regulatory Commission (ERC), released the monthly maximum retail pump prices which showed prices of super petrol, diesel and kerosene will go up in the next 30 days.

Motorists in Nairobi will pay Sh3.37 more for a litre of super petrol, following a 7.42 per cent increase in the average landed cost of the fuel at the port of Mombasa.

In Mandera, a litre of super petrol will leave motorists Sh115.48 poorer, compared to Sh98.39 that motorists in Mombasa will pay for the petroleum product.

A litre of diesel in Nairobi will retail at Sh88.71 in the next 30 days, Sh1.85 higher than in the last 30 days.

Diesel is used mostly by heavy commercial vehicles and powering machines in the agricultural and manufacturing sectors. Thus, its consumption is a good indicator of the country’s economic well-being.  

THERMAL GENERATORS

Already, consumption of the fuel has gone down in the last seven months as the private sector grapples with a tough environment, characterised with a charged political environment.  

Consumption of light diesel slipped from 1.3 billion litres in the first seven months of 2016 to 1.1 billion litres in the same period this year, according to Kenya National Bureau of Statistics (KNBS).

The depletion of water levels at the dams that include Masinga has also seen the country rely more on the costly thermal generators that burn a lot of diesel to produce electricity. Kenyans will, as a result, be forced to pay more for electricity at the end of the month.

The cost of diesel is passed on to power consumers and reflects on the monthly power bills as the fuel cost charge.

Poor households that are not connected to the electric grid will also have it rough in the next 30 days, with those in Nairobi paying Sh1.82 more for a litre of Kerosene.

It will be worse for such households in far-flung counties. In Lodwar, for example, consumers pay almost Sh80 for a litre of kerosene, compared to a median retail price of Sh66 for a litre of the fuel.

The energy regulator said the increase was due to average landed cost of the three petroleum products going up. “The changes in this month’s prices have been as a consequence of the average landed cost of imported Super Petrol increasing by 7.42 per cent from $560.40 (Sh57,160) per ton in August 2017 to $601.97 (Sh61,400) per ton in September 2017,” said the energy regulator in a press statement sent to newsrooms.

FREE ON BOARD

“Diesel increasing by 6.13 per cent from $479.21 (Sh48, 879) per ton in August 2017 to $508.56 (Sh51,873) per ton in September 2017 while Kerosene increases by 4.76 per cent from $494.02 (Sh50,390) per ton to $517.54 (Sh52,789) per ton in September 2017.”

The free on board (FOB) price of Murban crude oil went up in September by almost eight per cent from $51.60 (Sh5,263) per barrel in August to $55.70 (Sh5,681) per barrel, said ERC.  

The regulator added that a slight appreciation in the exchange rate of the US dollar also pushed up the average landed cost of the three fuels.

“Over the same period, the mean monthly US dollar to Kenya Shilling exchange rate appreciated by 0.24 per cent from Sh103.37 per $ in August 2017 Sh103.12  per $ in September 2017,” said ERC in a statement that was signed by its Acting Director General Robert Pavel Oimeke.