In what comes as a major relief for Kenyans, the government has announced new lower prices for fuel used by motorists and cooking by some households, reviving hopes of sustained reduction in the coming months. The Energy and Petroleum Regulatory Authority (EPRA) on 14th December 2024, published reduced the prices of Super Petrol, Kerosene, and Diesel for the month running between 15th December 2024 and 14th January 2025, giving most Kenyans breathing space ahead of the Christmas and New Year festivities.
EPRA, the industry regulator, the maximum pump prices for Super Petrol, Diesel, and Kerosene decreased by Ksh4.37 per litre, Ksh3 per litre, and Ksh3 per litre respectively, pushing pump prices to their lowest in nearly two years. The latest readjustment sets prices of Super Petrol, Diesel, and Kerosene, respectively at Ksh176.29, Diesel at Ksh165.06, and Ksh148.39.
According to the energy regulator, the prices are inclusive of the 16% Value Added Tax in line with the provisions of the Finance Act 2023, the Tax Laws (Amendment) Act 2020, and the revised rates for excise duty. Explaining the reduction, EPRA said the average landed cost of imported Super Petrol decreased by 4.46% from Ksh82,721 per cubic metre in October to Ksh79,029 per cubic metre in November.
Additionally, the average landed cost of imported diesel increased by 5.76% from Ksh78,524 per cubic metre to Ksh83,050 per cubic metre while kerosene increased by 1.87 per cent from Ksh83,625 per cubic metre to Ksh85,193 per cubic metre over the same period.
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Controlled petroleum pricing regulations serves to cap the retail prices of products that are already in the country so that importation and other incurred costs are recovered while ensuring reasonable prices to consumers.
“Currently, Kenya imports all its petroleum product requirements in refined form, and the products are traded in international markets based on a pricing benchmark,” EPRA announced. “Further, the trade of petroleum products in the international markets is denominated in United States dollars, and an exchange rate is applied to convert the dollars to shillings during the computation of local pump prices.”
There had been an expectation of a surge in petroleum prices following the increase in global oil prices brought about by the geopolitical tensions in the Middle East and the Russia-Ukraine war.
The Central Bank of Kenya (CBK), in its weekly bulletin published on Friday, 13th December, stated that international oil prices increased during the week ending December 11. According to CBK, the price of Murban oil increased to $73.30 on December 11, 2024, from $71.86 on December 5.
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