Fuel prices will remain unchanged for the fifth month in a row as the government continues pumping billions of shillings in subsidies to cushion Kenyans from the high cost of fuel.
The Energy and Petroleum Regulatory Authority (Epra) in its monthly fuel capping guide yesterday said prices for the February-March pricing cycle would remain unchanged.
This has been the case since the October-November cycle.
The government has been drawing funds from the Petroleum Development Levy (PDL) fund for the fuel stabilisation programme that has resulted in prices remaining unchanged over the last five months.
“In the period under review, the pump prices for super petrol, diesel and kerosene remain unchanged,” said Epra in a statement, adding that this was despite an increase in the cost of imported diesel and a slight dip in the cost of super petrol.
“The average landed cost of imported super petrol decreased by 0.86 per cent per cubic metre… diesel increased by 7.11 per cent per cubic metre… while kerosene decreased by 7.04 per cent per cubic metre.”
Super petrol will continue retailing at Sh129.72 per litre in Nairobi, diesel at Sh110.60 and kerosene at Sh103.54.
An analysis by Epra shows the current retail prices are heavily subsidised, with consumers of super petrol enjoying the biggest cut at Sh14.53.
This compares with the Sh144.25 per litre that they would have paid in the capital in absence of the subsidy.
In the case of diesel, consumers have been cushioned by as much as Sh23.29 per litre.
This is considering that without the subsidy, diesel prices would be at a high of Sh133.89 per litre in the capital.
Kerosene, on the other hand, has been subsidised by Sh15.88 per litre against the price of Sh119.42 per litre without the subsidy.
The government plans to continue subsidising fuel prices at the pump over the coming months.
The National Treasury in the Supplementary Budget tabled in Parliament earlier this month allocated the Petroleum Ministry Sh25 billion for the fuel stabilisation programme.
This, Treasury said, would cushion Kenyans from the high cost of petroleum products.
The money will be drawn from the PDL, a kitty funded by motorists who pay a levy of Sh5.40 per litre of super petrol and diesel they purchase at the pump.
In implementing the petroleum stabilisation programme, Epra has been slashing the margins for oil marketing companies in the monthly price cap reviews.
The oil firms are then compensated by Treasury from the PDL.
The levy has over the last two years been contentious and partly blamed for the high retail price of fuel in the country.
It was increased to the current rate of Sh5.40 per litre of diesel and super petrol from 40 cents a litre in July 2020.
Other fuels such as kerosene, cooking gas and jet fuel also pay PDL but at a lower rate of 40 cents a litre.
The government has been implementing the stabilisation programme since April last year following a surge in crude oil prices following increased demand.
Crude oil prices collapsed in 2020 as governments across the world put in place restrictions to tame the spread of Covid-19, dropping to a monthly average of $17 (Sh1,921) per barrel in April 2020.
Prices, however, recovered as economies reopened. Demand increased to $65 (Sh7,345) per barrel in March 2021 and $82 (Sh9,266) per barrel in January this year.
This has in the recent weeks gone up to $92 and is projected to hit $100 (Sh11,300) in the coming months.