Slight relief for Kenyans as fuel prices drop

Kenyans have got a slight relief for the festive season after the prices of fuel came down Saturday in the monthly pricing guidelines.

The Energy and Petroleum Regulatory Authority (Epra) cut the retail price of petrol by Sh4.37 per litre to sell at Sh176.29 while diesel and kerosene came down by similar margins of Sh3 per litre.

Diesel will sell at Sh165.06 and kerosene at Sh148.39 per litre.

Epra data showed the international prices of petrol dropped slightly while those of diesel and kerosene rose.

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The Kenya Shilling's exchange rate against the US dollar has remained more or less steady at around 129, meaning that the  forex component in the prices has not fluctuated much.

But while this price cut is timely for motorists amid increased travel during the Christmas and New Year holiday, it is unlikely to extend to commuters who usually have to pay higher fares at this time of year.

Already, those travelling out of the major cities such as Nairobi to the countryside are paying more than they did a week or so ago.

The latest review will see prices of petroleum products retail at the lowest level since April last year.

Prices remained constant in last month's Epra monthly guidelines.

Earlier in October when Epra cut the prices, there were calls for manufacturers and transporters to reduce their prices to pass the cost reduction to consumers.

They had noted that different players across different industries should pass the benefits of lower cost of operations to Kenyans.

Fuel prices have declined by more than Sh40 per litre from a high of Sh217 per litre in October last year.

Diesel has dropped from Sh205 per litre in October 2023.

“The industries and PSV operators might want to say that other costs have gone up but it cannot be the same because those other costs were also up one year ago. If we had fair business practices within the marketplace, we could have a significant ploughing back to the consumers,” Stephen Mutoro had told The Standard at a past interview.

He added that different industry players have in the past been quick to increase costs when fuel and other factors go up but rarely lower costs when the cost of production goes down.

“If prices go up because factors that are forcing us to price higher are going up, then we should also have a culture whereby when these factors come down, then we also climb down in terms of prices,” said Mutoro, adding that lowering costs would also have the benefit of spurring spending among consumers.

“Passing on the savings that the businesses are making due to lower cost of doing businesses, the uptake will also be more… they will in a way spur demand. We would expect this in terms of commuting and retail prices of commodities across the board.”

Fuel prices have consistently been on the decline since last year due to a combination of factors that include drop in crude oil price, the strengthening of the shilling and in certain instances helped by the government using funds petroleum development levy kitty to subsidise retail costs.

The shilling also made substantial gains, trading at Sh129 to the US dollar from upwards of Sh155 in October and Sh164 in December last year, meaning that importers spent less of the local currency when buying petroleum products.