More pain at the pump as fuel prices head north

Motorists and households will dig deeper into their pockets to stay on the roads and light up homes in the next month.

The Energy Regulatory Commission (ERC) Saturday increased the prices of petrol, diesel and kerosene, killing Kenyans’ hopes of enjoying the effects of lower crude prices.

According to the prices released by ERC, a litre of super petrol has gone up by Sh3.54 while that of diesel has shot up by Sh4.14.

Boda boda operators and motorists in Kakamega queue to buy petrol at a petrol station on May 3, 2016. Households will now pay more for the commodity. [PHOTO: BENJAMIN SAKWA/STANDARD]

Prior to the announcement, most petrol stations across the country were reporting that they had run out of stock. However, in most cases, they hold on to stock in anticipation of higher prices.

Kerosene, which is consumed by majority of households in urban slums and rural areas, has also increased by Sh3.02 per litre. The regulator attributed the upward trend to an increase in the cost of refined products from late January 2016 for diesel and kerosene and mid-February 2016 for super petrol as the prices of crude oil increased.

“As intimated in the March 2016 fuel prices review, the price of crude oil in the international market has been rising from a low of $29 (Sh2,919) per barrel early this year, to the current price of $47 (Sh4,731) per barrel,” ERC said in a statement.

The regulator clarified that since the commodities take time to reach the local market, the impact of the rise in crude oil took time to be felt in the local market. As a result of the rise, motorists in Nairobi will pay  Sh84.25 for a litre of petrol or Sh70.37 for a litre of diesel. Households within Nairobi will require Sh46.98 for a similar quantity of kerosene.

A litre of petrol from the port to Nairobi costs Sh4.25 for storage and distribution, Sh11.18 for oil marketing companies while government takes Sh32.92 as taxes and levies. Those in Mombasa continue to be better off owing to their close proximity to the port. A litre of petrol will cost Sh80.96 while diesel will retail for Sh67.11. Those buying a litre of kerosene in Mombasa will pay Sh44.28.

The prices, which will run up to mid-June, will see motorists fueling within Nakuru fork out Sh85.03 for a litre of petrol. A similar quantity of diesel will cost Sh71.32 while kerosene will retail at Sh47.86.

Fueling in Kisumu city will require Sh86.24 for a litre of petrol or Sh72.53 for a litre of diesel. In the same city, kerosene has been capped at Sh48.88.

In Eldoret town a litre of petrol and diesel will retail at a maximum of Sh86.17 and Sh72.47 respectively while kerosene will be Sh48.88.

Mandera continues to be the most expensive town to purchase petroleum products. A litre of petrol will retail at Sh98.06 while that of diesel will cost Sh84.18. Kerosene will be sold at Sh60.79.

Bottomed out

From March to April, ERC said, the average landed cost of imported super petrol increased by 13.29 per cent from $417.46 (Sh42,038) per tonne to $472.95 (Sh47,626).

Further, a litre of diesel increased by 16.06 per cent from $322.76 (Sh32,502) to $374.60 (Sh37,722). During the same period, kerosene increased by 9.62 per cent from $379.28 (Sh38,194) to 415.75 (Sh41,866) per tonne.

The Free on Board (FOB) price of Murban crude oil lifted in April was $42 (Sh4,229) per barrel, being a 9.95 per cent higher from $38.20 (Sh3,846) in March.

Over the same period, the shilling appreciated marginally to the dollar by 0.22 per cent from Sh101.48 in March to 101.26 in April. The exchange rate has an impact on prices of any import.

The last time crude oil was above $40 per barrel was in November last year ($43.55). Prices of crude oil have been stabilising giving a strong pointer that the price may have finally bottomed out.