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Kenyans to pay more for fuel after price review

BUSINESS NEWS
By Kenneth Kwama | June 15th 2015

Fuel prices are up for the third month in a row, after the Energy Regulatory Commission (ERC) reviewed prices upwards, signaling a cycle of what maybe spiral wave fuel of price increases.

Signs that last year’s big plunge in petrol prices would evaporate began showing last Thursday after Treasury Cabinet Secretary Henry Rotich announced an increment of Sh3 per litre of fuel for the roads maintenance levy during budget speech.

The new prices announced by the regulator yesterday saw the cost of super petrol rise by Sh4.39 effective last night. Diesel has gone up by Sh3.97 per litre while kerosene has increased by Sh2.54.

In Nairobi, super petrol will retail for Sh97.28 a litre while diesel and kerosene are pegged at 83.31 and Sh61.78.

Consumers in Mombasa will enjoy the lowest prices of Sh93.95 for a litre for super petrol, Sh80.02 a litre for diesel and Sh59.04 a litre for kerosene.

“The change in price was a result of the average landed cost of imported super petrol increasing from $669.15 (Sh64,908) per tonne in April 2015 to $703.37 (Sh68,227) per tonne in May 2015,” explained the ERC in a statement.

The regulator said that the average landed cost of imported diesel during the period increased from $581.49 (Sh56,405) per tonne to US$ 602.46 (Sh58,439)per tonne. The average landed cost of imported Kerosene during the same period increased from $613.22 (Sh59,482) per tonne to $633.13 (Sh61,414) per tonne.

Last year, fuel slumped to a historic low, touching as much as Sh30 a litre as global oil prices crashed, but since the beginning of this year, fuel has slowly clawed back up some units as crude prices continue to rise marginally.

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The commensurate fall of the shilling to the dollar has not helped matters for importers who have helplessly watched the shilling shed much value and in the process increasing imported fuel costs.

Between April and May, the mean monthly dollar rate to the shilling exchange rate depreciated by from Sh 93.95 per dollar in April to Sh96.86 per dollar in May 2015.

There have been muted concerns about the formula used by the ERC to compute fuel prices, but the regulator assured the public it was working within its limits.

“ERC wishes to assure the public of its continued commitment to the observance of fair competition and protection of the interests of both consumers and investors in the energy sector. In this respect, consumers are requested to be vigilant in reporting non-compliant retailers to the authorities for necessary legal action,” stated the ERC.

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