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Rush to villages pushed up December fuel consumption

By Dominic Omondi | February 18th 2021
The cost of fuel has risen to its highest rates since July 2019. [Caleb Kingwara, Standard]

Fuel consumption exploded in December last year as more Kenyans coming out of lockdown rushed to visit friends and relatives during the festive month.

In what was a reflection of increased economic activities, as restriction of movement was eased, the quantity of jet fuel consumed by aeroplanes jumped more than six-fold compared to April.

Official data shows that motorists increased their consumption of the fuel by 77 per cent to 145,290 tonnes, as Kenyans rushed to visit their loved ones during the festive season after a period of separation by the containment measures.

Jet fuel, whose consumption was at a paltry 6,320 tonnes in April 2020, dramatically jumped to 40,260 tonnes as President Uhuru Kenyatta allowed the aeroplanes back to the skies.

The government also benefited from the rally, with the revision of the petroleum levy contributing to a growth of 16 per cent in fees and fines levied by State entities for the period ending December 2020, compared to growth of 0.2 per cent in December 2019.

The rate of petroleum development levy was increased 13-fold to Sh5.40, leading to a bumper harvest by the government.

The quantity of diesel consumed jumped 43 per cent to 197,190 tonnes compared to 137,710 tonnes in April, when the containment measures were first implemented, dampening demand around the country.

The increased consumption of petroleum fuels, a leading economic indicator, coincides with enhanced economic activities after a dark period in which the stringent containment measures aimed at curbing the spread of Covid-19 depressed the business environment.

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The economy contracted by a revised 5.5 per cent before gaining some momentum in the third quarter by shrinking at a slower rate of -1.1 per cent.

This as the economy took a recovery path. But the holiday might come to an end, as the global prices of crude oil begin to rise - translating to higher retail prices locally.

As a result, the cost of fuel has risen to its highest rates since July 2019.

In what is also one of the largest monthly adjustments, the price of petrol went up by Sh8.19 per litre, while diesel and kerosene increased by Sh5.51 and Sh5.32 per litre respectively.

Thus, a litre of super petrol is retailing at Sh115.18 Nairobi, until March 14.

This is up from Sh106.99 a litre in the price control period ending February 14. Diesel retails at Sh101.91 per litre in the capital, up from Sh96.40, while kerosene rose to Sh92.44 up from Sh87.12.

“The changes in this month’s prices are as a consequence of the average landed cost of imported super petrol increasing 20.93 per cent… diesel increasing by 13.64 per cent… and kerosene increasing by 14.60 per cent,” said Epra.  

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