Pump prices to stay unchanged until mid-March

Motorists in Nairobi will continue paying Kes177.30 for petrol or Kes162 per litre of diesel, as the energy regulator held prices at the same level for the fourth month in a row during its latest review. Families using kerosene will access the commodity at Kes145.94 per litre.

Across Kenya motorists in Mombasa will buy fuel the cheapest at Kes174.98 for petrol and Kes159.76 for diesel while kerosene buyers will access the product at 143.69 per litre. Buyers in Mandera will pay the highest at Kes190.35 for petrol, diesel at Kes175.05 and kerosene at Kes158.98 per litre.

“The average landed cost of imported super petrol decreased by 0.12 percent from $660.65 per cubic metre in December to $659.87 per cubic metre in January 2022, diesel decreased by 4.76 percent from $818.45 per cubic metre to $779.49 per cubic metre,” the Energy and Petroleum Regulatory Authority (EPRA), said.

“The price of diesel has been cross-subsidized with that of super petrol while a subsidy of Kes19.41 per litre has been maintained for kerosene in order to cushion consumers from the otherwise high prices.”

In September 2022, the government partially removed subsidies that cushioned consumers from the global hike in oil prices, a move that saw pump prices rise to record levels.

Currently, the Treasury owes oil marketers about Kes50 billion in unpaid subsidies which they incurred last year in an effort to protect consumers from rising fuel costs.

“The government will utilise the Petroleum Development Levy to compensate oil marketing companies for the difference in cost,” added Epra.

Early this month, Nation reported that a lawyer Kevin Ithagi has sued the Epra over the cross-subsidy plan, terming the Kes19.41 markup on petrol “arbitrary.”

In the international market, the oil cartel Organization of the Petroleum Exporting Countries (OPEC) has raised projections for oil demand this year in its first upward revision for months citing China’s dropping of tough COVID-19 curbs.

OPEC also expects muted supply from Russia as well as from other non-OPEC producers, a move that is likely to leave the market even tighter.

Global oil demand will rise this year by 2.32 million barrels per day, or 2.3 percent, OPEC noted this week in its February update.