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Marginal relief at the pump as fuel prices continue to drop

BUSINESS
By Patrick Alushula | February 15th 2016

Consumers will pay less at the pump from today to March 14, according to the new fuel prices released yesterday.

Diesel prices dropped by Sh8.82 per litre, kerosene by Sh6.51 and super petrol by Sh2.14, the Energy Regulatory Commission (ERC) said.

Residents of Mombasa, who are closest to the port, will get the full benefits of the price drop, with motorists paying Sh83.20 for a litre of petrol and Sh64.63 for diesel. A litre of kerosene will retail at Sh36.94.

ERC Director General Joseph Nga’ng’a said the drop was a result of the average landed cost of imported super petrol reducing by 4.22 per cent in January from December’s prices.

Over the same period, the landed cost of diesel dropped by 21.8 per cent, and kerosene by 20.23 per cent.

Different Markets

Even though the free-on-board price for Murban crude oil in January was $29.95 (Sh3,054) — which was 19.60 per cent cheaper than December’s price of $37.25 (Sh3,799) — the ERC boss said the whole drop cannot be reflected at the pump.

“The relationship between the two is not linear and a host of factors influence the final prices of refined products. Such factors include the demand and supply of specific refined products in the world,” he said.

“It is worthwhile to note that crude oil and refined products are traded in completely different markets, and hence their price discoveries are unique and different... Consequently, use of crude oil benchmarks to relate movements in the retail pump prices locally can be misleading.”

Consumers in Nairobi will see a marginal Sh0.14 drop in petrol prices and will pay a maximum of Sh86.50 per litre from the previous Sh86.64. Diesel will retail at Sh67.88 a litre and kerosene at Sh39.62.

In Nakuru, petrol will cost Sh87.26 a litre, while diesel will retail at Sh68.84 and kerosene at Sh40.51. In Kisumu, consumers will part with Sh88.47 for a litre of petrol, Sh70.05 for diesel and Sh41.54 for kerosene.

To find out pump prices for other major towns, motorists can send the text message: “Price Name of major town” to the ERC-managed number 0707 667 623.

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