Fuel prices rise significantly in latest price review

Motorists will from midnight, Wednesday incur additional charges at the pump, this as the Energy and Petroleum Regulatory Authority (EPRA) moves to impact increments to the maximum retail prices for petroleum.

The regulator has in its mid-month review adjusted costs for all three petroleum commodities by an average Ksh.5.43, Ksh.2.24 and Ksh.2.40 for petrol, diesel and kerosene respectively.

The notable surge in fuel prices has been attributed mainly to a combination of increased landing costs for refined fuel as international crude prices remain on the rise and a weakened shilling during the March/April import window.

Brent Crude which makes for the petroleum gold standard has for instance remained northwards of Ksh.7,000 per barrel (USD 70) since early April having risen from a low Ksh.5,380 (USD 53.80) at the start of the year.

The weighted cost from the review will see petrol trade at Ksh.112.03 per liter in Nairobi while diesel and kerosene will retail at Ksh.104.37 and Ksh.104.62 for every liter respectively.

The latest price adjustment by EPRA is reflective of a continued hike to international crude prices with the regulator having made a near similar review on all three petroleum commodities during the last review on the 14^th of April.

The compounded increase of fuel prices is likely to bear a significant impact on fuel-induced inflationary pressures with the current value of the consumer price index pegged measure standing at an 18-month high of 6.56 percent.

The international commodities market which plays a significant role in the determination of petroleum prices locally meanwhile remains characterized by uncertainties defined by an interplay of ongoing trade disputes and planned production cuts.

While fore-planned production cuts by the oil exporters under the Organization of Petroleum Exporting Countries (OPEC) cartel would have assured of hiked petroleum prices at the world stage in 2019 , the re-awoken trade spat between the United States and China has eaten into gains by oil producers.

Escalating tensions in the middle East pitting among others two of the key oil producers in Saudi Arabia and Iran are however likely to extinguish any pricing recourse as the emerging conflict threatens the global supply of the precious commodity.

The global benchmark in Brent Crude has for instance eased to reflect on the jitters to trade at an average Ksh.7,023 (USD 70.23) per barrel as of May 14 from a week high of Ksh.7,248 (USD 72.48).