Energy regulator cuts fuel prices in face of rising inflation, higher taxes

Pump prices for super petrol, diesel and kerosene across Kenya have dropped marginally ahead of the festive season.

According to the latest price review by the Energy Regulatory Commission (ERC), super petrol has reduced by Sh0.40 per litre, diesel by Sh1.15 per litre and kerosene by Sh1.54 per litre.

Starting today, super petrol will retail at Sh90.60 a litre in Nairobi, while diesel and kerosene will cost Sh78.51 and Sh53.27, respectively. Those in Mombasa will pay the least for the products at Sh86.75 for super petrol, Sh75.23 for diesel and Sh50.55 for kerosene.

Landed cost

In Nakuru, a litre of super petrol will cost Sh90.80, while diesel and kerosene will retail at Sh79.43 and Sh54.12, respectively. In Eldoret, consumers will fork out a bit more at Sh91.95 for a litre of super petrol, Sh80.58 for diesel and Sh55.15 for kerosene.

Super petrol will be sold at Sh92.02 in Kisumu while diesel and petrol will require Sh80.65 and Sh55.14, respectively.

Of the major towns listed by ERC, the prices of the three commodities will be highest in Mandera, where super petrol and diesel will retail at Sh103.87 and Sh92.31 a litre, respectively, and kerosene will cost Sh67.08.

While announcing the new prices that will remain in place until January 14 next year, ERC Director General Joseph Ng’ang’a attributed the drop in prices to the commodities’ reduced average landed cost — which refers to the total price of a product once it has arrived at a buyer’s door. The landed cost factors in expenses like transport, taxes and currency conversations.

Mr Ng’ang’a said the average landed cost of imported super petrol decreased by 0.88 per cent from $546.85 (Sh55,943) per tonne in October to $542.02 (Sh55,449) per tonne in November.

Over the same period, diesel’s average landed cost decreased by 6.19 per cent from $506.93 (Sh51,859) per tonne to $475.53 (Sh48,647) per tonne. For kerosene, the drop was a larger 4.93 per cent from $510.88 (Sh52,263) to $485.70 (Sh49,687) per tonne.

The drop, noted Ng’an’ga, was also supported by a stronger shilling, which went from 102.51 to the dollar to 102.20 over the period, a 0.30 per cent appreciation.

Further, the oil that was received in November was 7.93 per cent cheaper at $43.55 (Sh4,455) per barrel, compared to October’s $47.30 (Sh4,471) per barrel. Yesterday, Brent crude hit a near-seven-year low of $36.33 (Sh3,717) a barrel.

With the cut in pump prices coming at a time when the new Excise Duty Act has seen the prices of commodities such as beverages, cigarettes and vehicles increase, and with inflation hitting a 2015 high in November, the ERC boss offered a clarification.

“In line with the Excise Duty Act 2015, one cargo of diesel has been increased by Sh2.061 per litre. The other diesel cargoes considered in this price review remain unaffected since their last dates of discharge were before the effective date of the new excise tax (December 1, 2015),” said Ng’ang’a.

He added that this information has been verified with the tax authorities, and noted that the excise duty for super petrol remained at Sh19.895 per litre while that of kerosene remained zero-rated.

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