Regulator hits motorists with price rise on petrol and diesel

Thursday September 14 2017

An attendant at petrol station. FILE PHOTO | NMG

An attendant at petrol station. FILE PHOTO | NMG 

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Petrol prices have increased for the first time since June, with a litre retailing at Sh2.22 more from Friday. However, the energy regulator on Thursday spared motorists further charges meant to compensate dealers.

Petrol, mostly consumed by private cars, will cost Nairobi car owners Sh98.30 per litre at the pump from Sh96.08, while diesel is up by a shilling to cost Sh86.86 in the capital city.

The Energy Regulatory Commission (ERC) attributed the increases to higher prices in the global market.

Petrol users were, however, spared a further Sh0.69 charge per litre that the commission had intended to include in the latest review to compensate oil marketers who incurred costs that were not passed on to motorists two years ago.

“The compensation will be paid when prices start decreasing in order to have less impact on consumer prices,” the ERC acting director-general Pavel Oimeke said in a statement Thursday.

Kerosene, mainly used by poor homes for cooking and lighting, is up Sh0.94 to Sh64.36 a litre in the city.

The new prices will be in place until mid-next month when they will be reviewed again by the industry regulator, which imposes price controls for the petroleum products market.

The ERC said the pump price increases were driven by a surge in imported cargo, with a tonne of petrol rising by 7.48 per cent, diesel by 1.48 per cent and kerosene by 0.72 per cent.

The petroleum price increases are set to pile pressure on private motorists, transporters, manufacturers and farmers, exerting further pressure on inflation that stood at 8.04 per cent last month, above the government’s preferred ceiling of 7.5 per cent.

Petrol users were expected from today to start paying a Sh945 million compensation, or an additional Sh0.69 per litre over the next six months, but the ERC has opted to delay implementation after gazetting the intention last month.

The compensation is meant to cover oil companies for paying the taxman additional road maintenance levy two years ago but the cost was not passed to consumers during the monthly reviews.

The oil companies are also seeking to recover losses that come with converting imported super petrol cargo from tonnes, the international standard unit, to litres at the local pump.

Petroleum prices vary across Kenya depending on the cost of transport from the Mombasa port, where the imported consignments land and are stored.

Mombasa consumers, therefore, enjoy the lowest retail prices at Sh95.08 a litre for petrol and Sh83.63 for diesel. Mandera motorists pay the highest at Sh112.11 for petrol and Sh100.67 for diesel.