Government stays fuel prices to ease the cost of living
INFLATION: The government maintained fuel prices despite a surge in global crude oil prices in a move that cushions consumers, preventing a fuel induced inflation.
In its monthly fuel adjustment released yesterday, the Energy Petroleum and Regulatory Authority (EPRA) sustained prices of Super Petrol, Diesel and Paraffin at their June levels, relieving Kenyans of the pain inflicted through the recent tax policies.
Unlike June, when only the price of Super Petrol went up by 77 cents, this time around, all the three commodities remained unchanged, even as the average landed cost of all the three commodities increased.
Price reviews
In yesterday’s price review, taking effect today for the next 30 days to August 15, a litre of Super Petrol will continue to retail at Sh127.14 and Sh124.72 in nairobi and Mombasa respectively, Sh126.75 in Nakuru, and Sh127.67 in both Eldoret and Kisumu.
EPRA also maintained the cost of a litre of diesel at Sh107.66 in Nairobi, Sh105.27 in Mombasa, Sh107.55 in Nakuru, and Sh108.46 in Kisumu and Eldoret.
A litre of Kerosene will still cost Sh97.85 in Nairobi, while in Mombasa the commodity will still fetch Sh95.46, similar to Nakuru, while in Eldoret, it will be sold at Sh 98.68.
The average landed cost of imported super petrol increased by 4.83 per cent from $496.10 (Sh53,554) per cubic metre in June to 2021 to per cubic metre in $520.04 (Sh56,138) per cubic metre in July, while diesel rose in the period under review by 3.69 per cent to $479.01 (Sh51709) per cubic metres from $461.95 equivalent to (Sh49,867).
“In the period under review, no Kerosene vessel was discharged at the Port of Mombasa,” said EPRA Director General Daniel Kiptoo.
Liz Nkukuu, an investment analyst said people have been impacted by the increasing cost of living amid a reduction in income from the aftermath of the Covid-19 pandemic shocks.
According to the Central Bank of Kenya (CBK) March data, those greatly impacted are the Nairobi lower income group and the rest of the country, whose inflation rates were 5.8 per cent and 6.6 per cent respectively, compared to 3.7 per cent for the Upper income people in Nairobi.
“The main reason for this is that they spend much of their income on food and other basic commodities which have seen significant increases,” said Nkukuu.
Kenya National Bureau of Statistics (KNBS) estimates that inflation rose to a 16-month high in June 2021, hitting 6.32 per cent compared to the 5.87 per cent May, driven by increased cost of sukuma wiki, watermelons and spinach increase, as well as the cost of transportation which was attributed to a rise in fuel prices.
Households also paid more to access utilities including water and electricity.
Nkukuu said it is important for both the government and individuals to look at ways in which they can create a hedge towards the high cost of living.
“Some of the things that the government can do include increasing food production. For any country to grow it is important that they are close to food sufficient.
This can be done through measures to improve food productivity levels like subsiding farm inputs, increasing amount of land under food production, reducing reliance on rainfed agriculture and helping create a market for the agricultural produce,” she said.
