Fuel prices remain unchanged in latest review

Fuel prices remain unchanged in latest review
File image of a fuel pump. PHOTO| COURTESY

The Energy and Petroleum Regulatory Authority (EPRA) has left the prices of all three petroleum products unchanged in its scheduled review on Wednesday.

The hold in prices for super petrol, diesel and kerosene is against the expectation of a considerable rise to costs from the prevailing high international crude prices.

For instance, EPRA has left the costs unchanged against a 4.83 and 3.69 per cent rise in the average landed cost of super petrol and diesel last month.

No kerosene vessel discharged at the Port of Mombasa during the period explaining the hold in the cost of the commodity in the review.

The all round hold in cost means that Kenyans will continue paying the same for all three commodities over the next month to August 14, 2021.

The hold in prices is attributable to the implementation of a government backed subsidy program dubbed the fuel price stabilization fund which remains at play despite the absence of requisite regulations.

The effect of the subsidy is for instance visible on supplier margins to oil marketing companies (OMCs).

The margins for petrol suppliers have for instance come down to Ksh.8.82 per litre from Ksh.12.39 last month while margins for the supply of diesel and kerosene have come down to Ksh.5.05 and Ksh.6.04 from Ksh.8 and Ksh.8.93 respectively in June.

The price of petrol in the capital city of Nairobi will remain at Ksh.127.14 per litre while that of diesel and kerosene will stand at Ksh.107.66 and Ksh.97.85.

Taxpayers are expected to foot the bill for the reduced margins to OMCs.

The government could be forced to greatly rely on the new stabilization mechanism to hold fuel costs as international crude prices remain on the rise.

For instance, the price of Murban crude closed last week at nearly Ksh.7,884 per barrel ($73), more than double the cost seen at the start of the COVID-19 pandemic.

The re-opening of economies across the world has pushed up the demand for oil to subsequently lead to the price elevation.

The government first deployed the stabilization mechanism in April this year.

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