Fuel prices drop for the second month in a row

A worker at a petrol station in Eldoret town adjusts fuel prices upwards on August 15, 2016. FILE PHOTO | NMG

What you need to know:

  • ERC attributes the drop to lower global oil prices
  • The prices will be in place until mid-next month when they will be due for a review again.

  • Kerosene, mainly used by poor homes for cooking and lighting, dropped by biggest margin of Sh2.48 to Sh62.56 a litre in Nairobi.

Fuel prices have dropped for the second month in a row with diesel going down by Sh2.43 a litre while petrol is now Sh1.64 cheaper in a trend that is expected to further ease inflation.

Petrol, mostly consumed by private cars, will from Friday midnight cost Nairobi motorists Sh97.10 per litre at the pump from Sh98.73 while diesel will cost Sh84.46 from Sh86.89.

The Energy Regulatory Commission (ERC), the energy sector watchdog, attributed the drops to lower global oil prices during the period of cargo importation.

The prices will be in place until mid-next month when they will be due for a review again.

The energy regulator said the cost of imported super petrol decreased 4.68 per cent per tonne, diesel’s was down 5.69 per cent while kerosene’s dropped 5.45 per cent, translating to lower prices at the pump.

Kerosene, mainly used by poor homes for cooking and lighting, dropped by biggest margin of Sh2.48 to Sh62.56 a litre in Nairobi.

Lower inflation

The lower costs look set to increase the purchasing power of motorists, push down operating costs for transporters and farmers, expected to further lower inflation which eased to 9.21 per cent in June from 11.48 per cent a month earlier.

Petroleum prices vary across Kenya due to transport costs that reflect how far a location is from Mombasa port where imported consignments land and are stored.

Mombasa consumers, therefore, enjoy the lowest retail prices at Sh93.87 a litre for petrol and Sh81.24 for diesel.

Petrol is most expensive in the northeastern town of Mandera at Sh110.91 a litre while diesel costs 98.27.

Kenya relies on imported petroleum products after it shut down the Mombasa-based refinery in September 2013.

There is a lag of between 30 and 45 days between the placement of import supply orders and actual delivery of consignments at the Mombasa port, meaning local prices do not immediately reflect global market trends.