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Slight reprieve at the pump as State slashes fuel prices by Sh5

By Macharia Kamau | October 15th 2021

A petrol station attendant at Total Petrol Station in Nakuru fuels a car on July 15, 2020. [Kipsang Joseph, Standard]

Super petrol to retail at Sh129.72 per litre in Nairobi, while diesel down to Sh110 per litre, thanks to price stabilisation programme.

Consumers of kerosene to enjoy the biggest reduction at Sh7 per litre.

The government has yielded to public outcry and applied subsidies on petroleum products, giving Kenyans a slight reprieve at the pump.

The Energy and Petroleum Regulatory Authority (Epra) in its latest monthly pricing guide issued yesterday cut the price of a litre of super petrol and diesel by Sh5, while kerosene will beginning midnight cost Sh7 less per litre.

This is as the government moved to cushion Kenyans from the high cost of fuel through a petroleum stabilisation programme.

The price reduction means super petrol will retail at Sh129.72 per litre in Nairobi over the October-November pricing cycle from a historical high of Sh134.72 per litre that had been in place until yesterday.

Diesel, on the other hand, will retail at Sh110.60 per litre in the capital from Sh115.6.

Kerosene, largely a poor man’s fuel for lighting and cooking, will retail at Sh103.54, down from Sh110.82.

“The maximum allowed petroleum pump prices in Nairobi for super petrol and diesel decrease by Sh5, while that of kerosene by Sh7.28 per litre,” said Epra in a statement.

In the price capping guide, Epra cut the margins of oil marketing companies as has been the case previously when the government subsidised pump prices.

The oil marketers will, however, be compensated later. The wholesale and retail margins for super petrol have been reduced to Sh6.26 per litre from Sh12.39, while that of diesel has been cut to Sh5.50 per litre from Sh12.36. The margin for kerosene has been reduced to Sh7.70 per litre from Sh12.36.

The government failed to apply the subsidy in the prices published on September 14, which saw retail prices shoot to the highest level since Epra started regulating them in 2010.

Between April and August, the government spent Sh6.6 billion to cushion motorists from the rising cost of petroleum products.

Other than high taxes by the government, the rise in local retail costs has been due to rising international crude oil prices, which have on average risen from about $17 (Sh1 870) per barrel last year to $73.5 (Sh8,085) in September this year. The local currency has also weakened, trading at an average of Sh110.21 to the dollar in September this year, compared to about Sh107.8 in April.

Consumers could get more reprieve if the National Assembly adopts proposals by the Committee on Finance and National Planning to cut fuel pump prices.

The committee, in the proposals contained in the Petroleum Products (Taxes and Levies) (Amendment) Bill, 2021, wants the Value Added Tax (VAT) on fuel halved to four per cent from the current eight per cent. This would result to a Sh4.99 reduction per litre.

The committee has also proposed the reduction of the Petroleum Development Levy for super petrol and diesel to Sh2.9 per litre from Sh5.40. It, however, pales the rate of 40 cents per litre that was in place until last year.

If adopted, the Bill will, however, push up the petroleum development levy for kerosene to Sh2.90 per litre from 40 cents.

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