Energy Regulatory Commission
Mombasa Port

Poor families hardest hit in May fuel price reviews

The energy regulator has signalled more pain at the pump as it announced that petrol, mostly consumed by private cars, is up by Sh0.34 a litre to Sh107.17 in Nairobi in its latest review.

Kerosene, relied upon by low income homes for lighting and powering cooking stoves, has increased the most by Sh1.50 to Sh78.22 in the city, according to the new monthly prices set by the Energy Regulatory Commission (ERC).

“The changes in this month’s prices have been as a consequence of the average landed cost of super petrol, which increased by 1.18 per cent, (with) diesel increasing by 2.91 per cent and kerosene rising by 3.06 per cent,” said ERC director-general Pavel Oimeke in a statement.

The regulator further said that during the period, the shilling appreciated 0.61 per cent against the dollar to stand at 100.54 units, which helped reduce Kenya’s foreign exchange costs in cargo procurement.

Prices of diesel, used to power commercial vehicles such as buses and tractors, have been on a steady climb, in what looks set to raise costs of transport, mechanised farming and industrial production.

Fuel costs have a direct bearing on inflation, being one of the items in the basket of goods and services whose pricing is tracked to measure the cost of living.

Kenya’s year-on-year inflation dropped to 3.73 per cent in April from 4.18 per cent a month earlier, mainly due to improved food production on the back of good rains and strengthening of the shilling against the dollar.

Petroleum prices currently vary across Kenya due to transport costs that reflect how far a location is from Mombasa Port where imported consignments land and are stored.

Mombasa consumers will pay the lowest at Sh103.88 per litre of petrol and Sh95.35 for an equal quantity of diesel following the latest price adjustment.

Petrol is most expensive in the northeastern town of Mandera and motorists will pay Sh120.98 a litre, or Sh17.1 more than in Mombasa, while diesel will cost 112.45 a litre.

A consistent rise in fuel prices has seen the government propose July 1 as the period to introduce a stabilisation fund that will hedge consumer fuel prices against global changes.

This will see the energy regulator pass on the benefits of lower prices to motorists by half and increase product prices by a similar margin should crude prices rise sharply.

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