Why fuel is costlier in your town than in other areas
By Fredrick Obura | June 22nd 2021
Construction of truck loading facility in Nairobi Terminal is one of the planned projects by KPC in the next Financial Year - (2021/22) depending on approval of the Budget by Treasury, which we will receive in July 2021,” said KPC.
Different scenarios unfold in other towns, especially those not served by KPC’s pipeline network, with road transport making fuel more expensive even when they are in close proximity to Mombasa. Most of the towns in the country are served by road.
It is the case for Taita Taveta town, about 270 kilometres from Mombasa, a litre of super petrol currently retails at Sh127.60.
This is slightly higher than Nairobi’s pump price for super petrol at Sh127.14. While Nairobi is further from Mombasa, it has the benefit of being supplied fuel through the pipeline.
In 2019, Epra stopped factoring road transport of fuel between Mombasa and Mombasa in the pricing formula, with the marketers compelled to use the pipeline and pay KPC Sh2.16 per litre of super petrol and diesel moved using the pipeline and Sh2.17 per litre for kerosene.
Towns like Taita Taveta do not have this benefit, thus even though closer to Mombasa, the retail prices include a higher road transport fee.
There has been debate on having a uniform retail price of fuel across the country.
The 2018 Cossop study, which Epra had contracted Kurrent Technologies to undertake, recommended the formulation of a framework that would make it possible to have uniform pump prices across the country.
This is, however, yet to take shape, with the regulator noting that it is still looking into how it can implement such a system.
“The Cossop report identified the feasibility of a petroleum pump price equalisation process but recommended for a proper policy and regulatory framework to ensure the success of the process. EPRA will continue consulting with key stakeholders to check the viability of such a process,” said Epra.
The study had looked at similar processes in Ghana, where the authorities publish indicative prices, as opposed to outright capping, with retailers who sell above the recommended retail prices required to explain their pricing.
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