Motorists to enjoy lower fuel prices

The retail price of fuel has dropped for the first time in four months.

This will save motorists about Sh870 million in the next one month.

A litre of petrol will cost Sh3.74 less, while diesel is down by Sh2.05 a litre.

Petrol in Nairobi will cost Sh91.39 a litre while diesel will cost Sh82.46. Kerosene is down to Sh59.10 a litre.

The next review by the Energy Regulatory Commission is expected on October 14.

The cost of fuel has been rising since May, in tandem with rising global crude prices and a Sh6 increment in the road maintenance levy in July.

There is a lag of between 30 and 45 days between the placing of orders and delivery at Mombasa Port, meaning that local prices do not immediately reflect global trends.

The cost of petrol imports dropped 8.8 per cent in the review period, while that of diesel was down 5.9 per cent, according to the energy regulator.

Kenyans consume an average of 125 million litres of petrol a month, and an average of 200 million litres of diesel.

The price drops will save consumers Sh877.5 million. Kenya imports all its petroleum after the Kenya Petroleum Refineries Ltd was shut down in September 2013.

The country bought its current stocks in July, when crude prices stood at $44.60 (Sh4,516) a barrel, down from $49.05 (Sh5,012) a month earlier.

Global oil prices rose marginally to $45.75 (Sh4,633) in August, when the country bought the consignment for next month, signalling a possible price increase.

Crude prices currently stand at $47 (Sh4,759) a barrel.

Petroleum prices vary across Kenya due to transport costs from Mombasa.

Mombasa consumers enjoy the lowest retail prices at Sh87.99 a litre for petrol and Sh79.08 for diesel.

Petrol is most expensive in the north eastern town of Mandera at Sh105.20 a litre.

The Energy Regulatory Commission started controlling fuel prices six years ago to shield consumers from wild swings in local prices that were often out of sync with global prices.