Kenya fuel costs remain high amid marginal drop in pricing

Thursday June 15 2023

A petrol station attendant holding a hand pump from a fuel dispenser at Nyeri County, Kenya on August 14, 2020. PHOTO | JOSEPH KANYI | NMG


Kenya’s Energy and Petroleum Regulatory Authority (Epra) has marginally reduced the cost of fuel by an average of Ksh0.47 ($0.003) per litre,  in what could be desperate effort to calm the growing public discontent over the high cost of living and punitive taxation measures.

The new move leaves retail prices relatively unchanged and compares unfavourably to an average price increase of Ksh8.33 ($0.06) per litre in the last review cycle (May 15 to June 14).

The regulator reduced the prices of petrol and diesel by Ksh0.66 ($0.004) per litre and Ksh1.12 ($0.008) per litre respectively and increased the price of kerosene by Ksh0.35 ($0.002) per litre from the review cycle starting from June 15 to July 14.

Read: Fresh fuel crisis looms in Kenya

As a result, a litre of super petrol, diesel, and kerosene in Nairobi will retail at Ksh182.04 ($1.3), Ksh167.28 ($1.2) and Ksh161.48 ($1.16) respectively.

In the last review cycle (May 15 to June 14), fuel prices were increased by an average of Ksh8.33 ($0.06) per litre where Super Petrol, Diesel and Kerosene increased by Kshs.3.40 ($0.02) per litre, Kshs.6.40 ($0.04) per litre and Kshs.15.19 ($0.11) per litre respectively after a subsidy on Diesel and Kerosene was abolished.


This pushed a litre of petrol, diesel and kerosene in Nairobi to Ksh182.70 ($1.31), Ksh168.40 ($1.21) and Ksh161.13 ($1.15) respectively.

In the latest fuel price review, the average landed cost of imported super petrol decreased by 1.09 percent to $716.15 (Ksh100,047) per cubic metre in May 2023 from $724.01 (Ksh101,144) per cubic metre in April 2023 while that of diesel increased by 0.84 percent to $693.86 (Ksh96,812) per cubic metre from $688.07 (Ksh96,113) per cubic metre in the same period.

On the other hand, the landed cost of imported kerosene decreased by 0.83 percent to $693.71 (Ksh96,911) per cubic metre from $699.54 (Ksh97,725) per cubic metre.

The international crude oil prices have declined by 24 percent in the last 12 months to a low of $79.55 (Ksh11,113) per barrel in May 2023 from a high of $104 (Ksh14,528) per barrel in June 2022.

The shilling exchange rate has however depreciated by 19 percent to Ksh141.39 against the US Dollar from Ksh118.53 in the same period, according to data from Epra.

The elevated fuel prices are projected to worsen the inflationary pressures with the monthly overall inflation for May rising to eight percent from 7.9 percent in April as a result of high food and fuel prices.

Read: Kenyans face rise in cooking gas price

In the 2023/2024 fiscal year the government faces a budget deficit of Ksh720.1 billion ($5.18 billion), with expenditures estimated at Ksh3.66 trillion ($26.33 billion) against projected revenues of Ksh2.89 trillion ($20.79 billion).

The Government increased fuel prices by more than Ksh20 ($0.14) after the inauguration of the President William Ruto as the fifth President of Kenya by abolishing fuel subsidy that cushioned consumers arguing subsidizing consumption is unsustainable.

This saw motorists pay more than Ksh20 ($0.14) per litre of fuel in additional charges for the period starting September 15 to October 14, 2022.

The price of Super Petrol increased by Ksh20.18 ($0.14) to a record high Ksh179.30 ($1.28) per litre, Diesel increased by Ksh25 ($0.18) to Ksh165 ($1.18) while Kerosene increased by Ksh20 ($0.14) to Ksh147.94 ($1.06) in Nairobi.

According to the Parliamentary Budget Office (PBO) fuel inflation has remained high despite a more than 30 percent drop   in the international oil prices from $117.7 per Barrel in June 2022 to $81.6 per Barrel in January 2023.