Regulator signals end of low prices as kerosene price rises

A car at a filling station. The retail price of Kerosene has increased by Sh2.53 per litre.

The Energy Regulatory Authority (ERC) yesterday announced a Sh2.53 increase in the price of a litre of kerosene.

While signalling that low prices may have bottomed out, the regulator announced a marginal Sh0.92 drop in the price of super petrol, while the retail price of diesel reduced by only Sh2.18 per litre.

Starting today, Nairobi motorists will pay less for a litre of petrol at Sh85.58, while diesel will retail at Sh65.70, down by Sh2.18 a litre. But kerosene, has increased by Sh2.53 to Sh42.15 a litre.

In the mid-February review, diesel had dropped by Sh8.82, kerosene by Sh6.51, while super petrol had shed Sh2.14.

 ERC boss Joseph Nga’ng’a said in a statement that the prices of crude oil have stabilised and that may impact on future prices, a cautious reminder that signals the end of further drop in retail prices.

This expectation is informed by the recent surge in international crude oil prices that has since climbed to $40 mark after falling to below $27 mark.

“After bottoming out at around $29 (Sh2,938) per barrel, there has been resurgence in the price of crude oil in the international market, with the price currently standing at $40 (Sh4,054) per barrel. This will influence pricing of petroleum products locally,” he said.

The announcement means that for the period up to April 14, in Nairobi, kerosene will retail at Sh42.15, while those in Mombasa will get it at Sh39.46. In Nakuru, a litre will go for Sh43.04 and consumers in Kakamega will buy the same at Sh44.13.

The kerosene retail prices are as a consequence of average landed cost of imported kerosene increasing by 9.82 per cent to $352.92 (Sh35,766) per tonne.

For petrol, whose average landed cost between January and February dropped by 4.61 per cent to $473.84 (Sh48,029) per tonne, motorists fuelling within Nairobi will fork out Sh85.58 for a litre of super petrol. While it will be cheaper to fuel in Mombasa (Sh82.28 per litre), getting a litre of petrol in Mandera will, however, require Sh99.38.

Those in Nakuru will part with Sh86.34 while in Kisumu and Eldoret, a litre of the commodity will be bought at Sh87.55 and Sh87.49 respectively.

Having witnessed a 9.43 per cent drop in the average landed cost to $311.11 (Sh31,534), a litre of diesel will now cost Sh65.70 in Nairobi as compared to Sh62.46 in Mombasa.

In Kisumu, a litre will retail at Sh67.88 while in Eldoret, it will be Sh67.81.

The fuel was shipped in February when the Free on Board Price for Murban oil was $33 per barrel.

This was a 10.18 per cent increase from $29.95 that was charged for a barrel of oil in January.

During the period, the exchange rate, which also affects the pricing, saw the shilling appreciate by 0.51 per cent against US dollar to Sh101.81 per US dollar in February.

Oil prices have plummeted 70 per cent since June 2014, falling as low as $27 per barrel in January but there have been signs of bottoming out. On Friday last week, Brent crude oil was quoted 1.9 per cent higher to trade at $40.79.