For the next one month, the cost of energy across Kenya is set to pile even more pressure on already weary public following a huge increase in the cost of petrol, diesel and kerosene in the latest price review.

According to the Energy and Petroleum Regulatory Authority (EPRA), motorists will be forced to pay KES8.99 more per litre of petrol, KES8.67 for diesel and KES9.65 extra per liter of kerosene. 

On average fuel prices in Nairobi will be retailing at KES186.31 per litre of petrol, KES171.58 per litre of diesel and KES156.58 per liter of kerosene until August 14th when the next review is expected. Consumers in Mombasa will be paying the least per litre of the commodities at KES183.02 for petrol, KES168.30 for diesel and KES153.29 for kerosene. 

In an update on Monday, EPRA attributed the increase in fuel prices to steady increase in the landed costs of the various products: petrol (6.45 percent), diesel (6.27 percent) and kerosene (6.95 percent).

In Kenya, the increase in global oil prices usually manifests on inflation, particularly through transportation costs. With higher prices for diesel and petrol--which are key fuels that are used in the transportation sector, manufacturers are likely to transfer the negative impact of higher costs to the already burdened final consumer.

"The prices are inclusive of the 16 percent VAT in line with the provisions of the Finance Act 2023, the tax laws (amendment) Act 2024, and the revised rates for excise duty adjusted for inflation as per legal notice no.194 of 2020," EPRA explained.

The latest review's increase comes as a shock to the industry which has enjoyed relative stability in fuel prices since the start of the year. For instance, in the February to March cycle, fuel prices remained unchanged only to be subjected to minor adjustments in April-May period.

According to the BBC, the recent war between Iran and Israel triggered a sharp increase in global oil prices, with Brent crude, the global benchmark for oil, hitting a five-month high of $81.40 at one point when the US struck Iran's nuclear sites. However, reports of ceasefire days after saw the price ease to about $69 a barrel.

For May to June, pump prices held steady at KES174.73 per litre of petrol, KES164.86 for diesel, and KES148.99 for kerosene. In the just ended price review cycle, June-July, super petrol prices were increased by KES2.69, while diesel and kerosene decreased by KES1.95 and KES2.06 respectively.

At the moment, energy consumers in Kenya pay some of the highest fuel prices in Africa, attributable to taxes rather than global price swings. 

The cost of fuel is usually a critical input for many industries in country including agriculture, manufacturing, transportation, besides household expenditure. This implies that taxing fuel heavily goes a long way in raising the cost of production for companies, thereby lowering the competitiveness of finished goods. 

Players across the industry are set to suffer with expected uptick in food prices and therefore inflation as diesel, which is used in farming and trucking is taxed at roughly 77 percent of product cost.

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