Petrol: Pain at the pump for motorists as prices increase

Tuesday, March 15th, 2022 06:14 | By

The honeymoon for motorists has been brought to a screeching halt following the government’s decision to increase the price of Super and Diesel by Sh5.

Energy Petroleum and Regulatory Authority (Epra) has maintained the commodity prices for the last four months using the subsidy kitty, which cushions motorists from rising global fuel prices.

However, the scheme is facing an uncertain future, with undertones from oil majors, who claim the government is struggling to compensate them for high cuts in their margins.

Epra Director-General Daniel Kiptoo announced the new pump prices yesterday. They will be enforced for the next 30 days.

“In the period under review, the pump prices of Super Petrol and Diesel increased by Sh5 per litre respectively, while that of Kerosene remains unchanged,” he said.

Access the products

In Nairobi, Super will retail at Sh134.72 per litre, while Diesel will go for Sh115.60. In Mombasa, a litre of Super will retail at Sh132.46 and 113.36 respectively, while in Nakuru motorists will access the products at Sh134.24 and Sh115.43 respectively.

In Eldoret, the commodity will retail for Sh135.13 for a litre of Super and Sh116.32 for Diesel. In Kisumu City, motorists will buy a litre of Super Sh135.13, with a litre of Diesel going for Sh116.30. Kiptoo said the average landed cost of imported Super increased by 13.34 per cent from $596.79 (Sh68,153.42) per cubic metre in January 2022 to $676.40 (Sh77,244.9) in February 2022.

Kenya imports its oil consignment from Abu Dhabi’s Murban Bab Oil Fields whose February 2022 Free on Board (FOB) prices were posted at $74.36 (Sh8,491.9) per barrel, a decrease of 9.35 per cent from the $82.03 (Sh9,367.8) per barrel in January 2022. In the period under review, Diesel increased by 11.74 per cent from $606.16 (Sh69,223.5) per cubic metre to $677.31 (Sh77,348.8) per cubic metre.

However, despite the landed cost of Kerosene increasing by 15.94 per cent to $619.57 (Sh70,754.8) per cubic metre from $534.38 (Sh61,026.2) Epra did not increase the pump prices. A section of Kenyans reacted to the increment with outrage, saying it will have a direct impact on the cost of living, given that diesel is a major factor of production.

“This means mwananchi is going to fork out more for not only the fuel but also for other consumer goods and services,” said Joe Gakuo, the chief executive of Upstream oil and gas, while Peter Koigi, a cab driver said the increment will erode his profit margins.

Continue suffering

“As cab drivers, we will continue suffering. Already our profits are low and with a rise in the price of petrol, it means the profits will continue to dwindle,” said Koigi. The increment also comes amidst a surge in the price of Liquified Petroleum Gas (LPG) used by many households for cooking, which have soared by almost 60 per cent since January 2021. Early this month, the cost of refilling a 6kg cylinder increased to Sh1,500 from an average of Sh1,400, while a 13kg cylinder rose by Sh300 to Sh3,300.

The announcement is further expected to put pressure on the cost of electricity just weeks after Epra announced the first phase of 15 per cent power cost reduction, signalling that the 30 per cent cost reduction target could be thrown away soon.

Energy charge in electricity billing is usually adjusted based on the global changes in fuel costs.

Other charges that affect electricity bills include levies and taxes, 16 per cent VAT and non-fuel energy costs.

More on Commerce