Diesel and petrol prices soften, but higher prices seen

Monday March 14 2016

A petrol station attendant serves a customer in Nairobi. An increase in pump prices is one of the causes of the sharp rise in the cost of basic commodities. PHOTO | FILE

A petrol station attendant serves a customer in Nairobi. PHOTO | FILE 

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Diesel and petrol prices are down by Sh2 and one shilling respectively as Kerosene prices rise by two shillings in the March-April Energy Regulatory (ERC) prices, review.

Nairobi motorists will, starting Monday midnight, pay Sh0.92 less for a litre of petrol at Sh85.58 while diesel is down Sh2.18 a litre to Sh65.70.

But kerosene, mainly used by poor homes for lighting and powering their cook stoves, has increased by Sh2.53 to Sh42.15 a litre.

The Energy Regulatory Commission (ERC) said that the import cost of super petrol dropped by 4.61 per cent in February, that of diesel by 9.4 per cent while kerosene’s was up by 9.8 per cent, explaining the local pump price movements.

There is a one-month lag between the placing of supply orders and the actual delivery of consignments at the Mombasa port, meaning local prices do not immediately reflect global market trends, but are at least one month behind.

“After bottoming at around $29 per barrel, there has been resurgence in the price of crude oil in the international market, with the price currently at $40 per barrel,” the ERC says.

“This will influence future pricing of petroleum products locally.” This sets the stage for price increases in the coming review mid-April.

The shilling appreciated by 0.51 per cent to Sh101.81 last month, making it less expensive to buy petroleum in the dollar-denominated global market.