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Pain for motorists as fuel prices shoot up

By Awal Mohammed | July 15th 2020

A pump attendant fuels a motorbike at a Kobil Petrol station, Nairobi. [Elvis Ogina, Standard]

Kenyans will endure more pain in the midst of a pandemic after fuel prices shot up by more than Sh10 per litre yesterday.

The Energy and Petroleum Regulatory Authority (Epra) raised petrol and diesel prices by Sh11 and Sh17 respectively in new rates that took effect at midnight.

The new pricing for the next 30 days will see motorists pay Sh100.48 for a litre of petrol in Nairobi, up from last month’s Sh89.10. 

Earlier, the expected price increase had circulated on social media, with Kenyans lamenting the added costs, but Epra was quick to dispel the information.

The increase in price was despite the cost of crude oil globally remaining below the $50 (Sh5,300) per barrel, and the shilling remaining stable against the dollar in the last two months.

Last month, crude oil was selling at $23.52 (Sh2,500) per barrel which has now increased to $36.34 (Sh3,850).  

Mombasa residents will enjoy the cheapest retail prices at Sh98.11 for petrol and Sh89.50 for diesel.

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“Taking into account the weighted average cost of imported refined petroleum products, the changes in the maximum allowed petroleum pump prices in Nairobi... for super petrol, diesel and kerosene increase by Sh11.38, Sh17.30 and Sh2.98 per litre respectively,” said Epra Director General Pavel Oimeke.

The government’s hunger for taxes haunts the sector and is the key driver of prices.

Going by last month’s review, the government pocketed Sh43 for every litre of petrol sold. This month, it will take home an additional Sh10 to push the total tax levied on super petrol to Sh53.

This is according to the revised Petroleum Development Levy on super petrol and diesel in the Tax Laws (Amendment) Act, 2020, and the eight per cent value-added tax charge that fuel products attract passed in the Finance Act, 2018.

Interestingly, Kenya did not offload any kerosene at the Port of Mombasa this month, maintaining its May landing price, and the commodity will retail at Sh65.45 in Nairobi, an increase of Sh2.98 per litre.

This is a reprieve for low-income households that depend on kerosene for lighting and cooking, and who have borne the brunt of price increases in the recent past.

Epra said the landing prices of petrol and diesel had increased by 12.64 per cent and 32.16 per cent, which led to the hike.

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