Fuel prices projected to rise

Fuel prices projected to rise

The Petroleum Institute of East Africa (PIEA) has challenged the Energy Regulatory Commission (ERC) to sync its operations to changes in the global crude oil market.

This comes as the time lag for adjusting prices, usually catches the regulator and oil marketers flat footed.

PIEA Chairman Powel Maimba said the time lag of 40 days from the time an oil marketer makes an order to the time the petroleum products are delivered usually results in inaccurate pricing of fuel.

“We are not in close sync with the current global price changes. As soon as we start matching the period and offloading of the fuel we should be able to reflect the change on a regular basis,” Mr Maimba said.

The challenge for ERC has been that Kenya is a net importer of refined products which do not necessarily track crude price changes.

The remarks come as the industry lobby group projects fuel prices to hit Sh100 by January 2017.

This as international crude oil prices rise to $65 a barrel.

“The global oil prices are looking unlikely like they will go down as was the case last case last year and this year. Therefore we should see an increase in pump prices over 2017,” he said.

Report by Hilda Wathithi

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