Last month, Nairobi motorists were paying Ksh188.84 and Ksh171.60 respectively for a litre of Super Petrol and Diesel, and Ksh158.32 for a litre of Kerosene.
The Energy and Petroleum Regulatory Authority (EPRA) has lowered fuel prices for the period between Tuesday, October 15 and Thursday, November 14, despite sentiments by the Central Bank of Kenya (CBK) that international oil prices increased recently.
In its monthly review report released on Monday, October 14, EPRA announced that the maximum allowed petroleum pump price for Super Petrol, Diesel and Kerosene all dropped, with Super Petrol and Diesel having the biggest decrease in prices.
Last month, Nairobi motorists were paying Ksh188.84 and Ksh171.60 respectively for a litre of Super Petrol and Diesel, and Ksh158.32 for a litre of Kerosene.
“In accordance with Section 101(y) of the Petroleum Act 2019 and Legal Notice No.192 of 2022, we have calculated the maximum retail prices of petroleum products, which will be in force from 15th October 2024 to 14th November 2024.
Fuel watch: New fuel prices as announced by EPRA on October 14, 2024. /VIRAL TEA KE
“Taking into account the weighted average cost of imported refined petroleum products, the changes in the maximum allowed petroleum pump prices in Nairobi are as follows; Super Petrol, Diesel and Kerosene decrease by KShs.8.18, KShs.3.54, and KShs.6.93 per litre respectively,” stated EPRA in part.
Now, Nairobi motorists, until the next monthly review will pay Ksh180.66 for a litre of Super Petrol, Ksh168.06 for a litre of Diesel and Ksh151.39 for a litre of Kerosene.
The prices are, according to EPRA, inclusive of the 16 per cent Value Added Tax (VAT) in line with the provisions of the Finance Act 2023, and the Tax Laws Amendment Act of 2020.
EPRA also announced a decrease in the landed cost of imported Super Petrol which edged lower by 1.53% from Ksh91,300 (US$708.47 )per cubic metre in July 2024 to 89,938 (US$697.62) per cubic metre in August.
Meanwhile, the landed cost of Diesel decreased by 2.95% from Ksh89,528 (US$693.82) per cubic metre to 86,900 (US$673.36) per cubic metre.
There were fears that the Central Bank of Kenya’s (CBK) sentiments on global fuel prices threatened to push up the cost of the product. The heightened tension was a result of rising global oil prices, geopolitical conflicts, and local legal hurdles and despite a recent drop in the landed cost of diesel, it is uncertain what the immediate future looks like.
On Friday, October 11, CBK revealed that “International oil prices increased during the week ending October 9, mainly driven by geopolitical tensions in the Middle East. The price of Murban oil increased to USD 78.62 on October 9, from USD 76.54 on October 3.”
With this, analysts, despite the latest relief, are predicting that the humanitarian crisis in the region will force the prices of fuel at the pump to go up eventually.
The geopolitical conflict in the Middle East has offered a sticky situation in terms of maintaining the current fuel prices, with hostilities disrupting oil supply chains, forcing international prices up, with Kenya bearing the brunt of global shifts. The rising costs have a ripple effect which could jeopardise inflation gains in the country, with consumers bearing the financial burden.
Even worse is the legal battle surrounding the Roads Maintenance Levy (RML), with the High Court on Monday, October 7, extending an order barring EPRA from implementing a Ksh7 per litre levy increase until October 15. Before this ruling, the controversial RML was raised from Ksh18 in the June-July cycle to Ksh25, affecting both consumers of Super Petrol and Diesel.
While the court’s ruling has momentarily protected motorists from higher costs, it is the looming expiry date on the court ruling that has many teetering on the brink. Any delay in resolving the issue could see a sharp rise in prices, dampening the effects of a strong shilling and stable landed fuel costs.
In the last pricing cycle, the landed cost of diesel fell by 2.95 per cent to USD 673.36 (Ksh87,146.25) per cubic metre, while that of petrol dropped by 1.53 per cent, and despite the reductions, Kenyans’ scepticism about the price relief at the pump due to the global market’s volatility and EPRA’s previous actions is evident.
EPRA’s controversial decision to raise the RML in July, despite public outcry, is now leaving many uneasy regarding the next monthly review, with the regulator’s previous stance being one of downplaying the impact of court rulings on pricing decisions.
The upcoming ruling on October 15, a day after the now-announced fuel price review will determine whether the agency will continue to enforce higher levies or comply with the High Court’s directive.
Should the stay order be lifted, the next monthly review for November-December could see fuel prices adjusted upwards to include the RML, despite the government’s assurances in the recent past that the RML would not raise the cost of living through an increase in petroleum prices.
