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More misery for consumers as fuel prices hit four-year high

By Patrick Alushula | Published Fri, June 15th 2018 at 00:00, Updated June 14th 2018 at 22:39 GMT +3
Sophia Mugundu, a petrol station attendant in Nyeri refuelling a Matatu. [Kibata Kihu/Standard]

Consumers will have to fork out more money for petroleum products after the latest price review saw the costs of diesel, petrol and kerosene go up.

The Energy Regulatory Commission (ERC) increased the price of super petrol by Sh1.64 yesterday while diesel and kerosene were the worst hit, climbing by Sh4.96 and Sh5.88 respectively.

The hike comes even as the Government prepares to reintroduce value added tax on petroleum products as well as add taxes on kerosene to be at par with those charged on diesel.

For fuel stations within Nairobi, petrol will retail at Sh108.81 while diesel and kerosene will be Sh103.60 and Sh84.10 respectively.

This level of prices was last seen in October 2014 when a litre of petrol retailed at Sh111.7 in Nairobi. It had previously hit a historic high of Sh124 a litre in November 2011.

ERC said in a statement that the changes were informed by the rebounding global oil prices which also put pressure on the average cost of imported oil. The price of oil has been on a consistent rise since crossing into at least $50 (Sh5, 000) per barrel in August last year.

“The free on board price of Murban crude oil lifted in May 2018 was posted at $78.25 (Sh7,895) per barrel, an increase of 8.83 per cent from $71.90 (Sh7,254) per barrel in April 2018,” said ERC Director-General Pavel Oimeke.

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Added taxes

The future is set to be even tougher for consumers with plans to reintroduce value added taxes on petroleum products. This would push up the price of petrol in Nairobi to over Sh120 per litre.

Budgets will be worse off for consumers of kerosene, mostly low-income households, as ERC wants National Treasury to increase tax on kerosene by Sh21 per litre within one year to tame adulteration of fuel.

Kerosene, which is the only option among many households for cooking and lighting, is also illegally added to diesel and super petrol so as to increase volumes but causes untold harm to the environmental and vehicle engines.

The new prices that took effect midnight will see Mombasa residents pay at least Sh105.51 for a litre of petrol while diesel will be at least Sh100.31, while the least price for kerosene will be Sh81.31 a litre.

The Kenya shilling also depreciated marginally against the US dollar to exchange at 100.87 in May against 100.54 the previous month.

Yesterday, ERC put up a public notice asking motorists to be extra vigilant when re-fueling their vehicles at retail stations.

“Motorists who experience jerking, loss of engine power and excessive smoke from the vehicle’s exhaust after refueling are urged to report the matter to the commission,” said Mr Oimeke.

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