Relief for motorists as diesel prices dip by Sh19

Friday, May 15th, 2020 00:00 |
An attendant fuels a car at a petrol Station.PHOTO/COURTESY.

Noel Wandera @NoelWandera5

Kenyans will continue enjoying lower cost of fuel, after oil marketers lost their bid to press for pain at the pump, claiming they still hold expensive stock bought in April.

Announcing the monthly fuel cost review yesterday, Energy and Petroleum Regulatory Authority (Epra) said motorists will enjoy lower costs of petrol and diesel prices which dropped by Sh9.54 and Sh19.19 per litre respectively.

This will significantly impact on the cost of living with the cost of super and diesel having dropped by Sh27.54 and Sh23.23 per litre in the last two months.

The new prices are attributable to lower landing costs of fuel. However, the cost of kerosene, which is used for cooking and lighting by most urban dwellers, increased by Sh2.49 per litre.

Price variations

“The price of kerosene has been maintained but with adjustments in value added tax calculations,” Epra explained.

In Nairobi, motorists will pay Sh83.33 and Sh78.37 for a litre of super petrol and diesel respectively, and Sh79.77 for kerosene. 

Mombasa residents will pay Sh80.85, Sh75.88, and Sh77.29 for a litre of petrol, diesel and kerosene respectively.

Consumers in Nakuru will pay Sh83.22 for a litre of super petrol, while a litre of diesel will go for Sh78.41, with kerosene retailing at Sh79.81 while in Eldoret, super petrol will retail at Sh84.20 a litre, diesel will go for Sh79.38 and kerosene at Sh80.78.

At the lake side town of Kisumu, a litre of petrol will retail at Sh84.19, diesel Sh79.37 and kerosene at Sh80.77 respectively.

The relief came despite efforts by oil marketers to lobby Petroleum Cabinet Secretary John Munyes against lowering prices, calling for the review to be based on the March crude costs of $35.58 (Sh3,797.8) a barrel.

Oil marketing firms supply coordination committee chairman Martin Kimani said the cost of super and diesel had decreased by 40 per cent in April, disrupting their sales and leading to accumulation of older priced stocks in their systems.

Double relief

Epra said landing cost of super petrol dipped by 38.94 per cent to $188.07 (Sh20,074.6) per cubic metre (1,000 litres) in April, from $309.03 (Sh32,985.9) per cubic metres in March, while diesel cost decreased by 44.04 per cent to $242.13 (Sh25,844.96) per cubic metres from $432.70 (Sh46,186.4) per cubic metre to $242.13 (Sh25,844.96).

This is double relief to an economy that is slowly being weaned out of a lockdown that started in April through a dawn-to-dusk curfew that has led to contraction in the economy. 

Authorities are allowing restricted opening of restaurants in public places and preparation to open Kenya’s international airspace.

It is also hoped that the massive reduction in the price of diesel will lead to lowering of commodity prices such as foodstuffs, which were never adjusted downwards, with claims from traders that cost of transport was still high owing to the marginal reduction in diesel.

This week, world oil prices fell as investors worried about a second wave of coronavirus infections, but new output cuts from Saudi Arabia tempered worries about oversupply and limited price losses.

Prices received a boost, however, after a Saudi energy ministry official said on Monday that the Ministry has directed national oil company Saudi Aramco to reduce its crude oil production for June by an extra one million barrels per day (pbd).

The reduction comes as a pact by the Organisation of Petroleum Exporting Countries (Opec) and allied producers to cut production from May 1 by about 10 million bpd in an effort to support prices, is in effect.

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