Regulator hikes fuel prices in Kenya

Friday May 14 2021
Petrol station.

A petrol attendant fuels a car in Nyeri, central Kenya. PHOTO | FILE | NMG


Kenya has increased prices for super petrol despite a decline in the average landed cost of petroleum products, inflicting more financial pain on motorists.

The Energy and Petroleum Regulatory Authority (EPRA) increased the price of super petrol by Ksh3.56 ($0.03) per litre while that of diesel and kerosene remain unchanged for the period May 15 to June 14.

The latest price review pushes the price per litre of super petrol in Nairobi to Ksh126.37 ($1.18) while that of diesel and kerosene remain unchanged at Ksh107.66 ($1) and Ksh97.85 ($0.91), respectively.

The agency increased the price of super petrol by Ksh7.63 ($0.07) per litre, diesel by Ksh5.75 ($0.05) per litre and kerosene by Ksh5.41 ($0.05) per litre, the largest increase in the last 10 years setting the stage for increased cost of living and an economic slowdown due to increased transportation costs and increased inputs costs for manufacturers.

However, the average landed cost of imported Super Petrol decreased by 0.57 percent to $488.69 per cubic metre in April from $491.5 per cubic metre in March while that of diesel declined by 1.03 percent to $439.6 per cubic metre from $444.17 per cubic metre during the same period.

The average landed cost of imported kerosene increased by 2.01 percent to $430.4 per cubic metre from $421.9 per cubic metre during the period under review.


In April, EPRA did not hike fuel prices despite an increase in their landed cost, with the regulator cutting the oil marketers’ margins by about 30 percent to Ksh7.95 ($0.07) per litre of petrol from Ksh12.39 ($0.11) which is usually treated as fixed rate in the pricing formula.

Margins on diesel declined to Ksh10.08 ($0.09) a litre from Ksh12.36 ($0.11).

The margin adjustment left the fuel prices for the April 15-May 14 period unchanged with EPRA arguing that the move was meant to protect the interests of consumers and investors in the petroleum sectors.

Later, the oil marketing companies (OMCs) began negotiations with the National Treasury to be compensated for the loss of their margins.

As part of the deal, it was agreed that oil marketers be compensated based on the value of cargo volumes factored in the pricing formula for the April-May pump prices computation, with the refund rate being equivalent to the margin reduction per litre per product for the pump prices for Nairobi for the period April 15 to May 14.

They also agreed to impose additional burden to motorists and households of paying the oil dealers an extra Ksh0.5 ($0.0046) per litre of fuel of which they (OMCs) claim is the administrative costs of processing the receipt and disbursement of money from the National Treasury.

This cost was to be factored in in the May-June fuel pricing circle.