Petrol price has dropped by Sh4.87 a litre and will for the next one
month, retail at a six-year low, offering a big relief to motorists.
This is lowest petrol price since December 2010 when the regulator
started controlling the cost of fuel. FILE |
NATION MEDIA GROUP
Petrol price has dropped by Sh4.87 a litre and will for the next
one month, retail at a six-year low, offering a big relief to
motorists.
The Energy Regulatory Commission (ERC) on
Thursday cut the cost of petrol, mainly used to run private cars, to
Sh80.71 a litre from Sh85.58 in Nairobi, the sixth drop in a row in the
monthly reviews.
This is lowest petrol price since December 2010 when the regulator started controlling the cost of fuel.
But the price of diesel, used for powering industries, trucks and buses is up Sh0.53 per litre to Sh66.23 in the capital.
Kerosene, mostly used by low-income households for lighting and powering stoves, increased Sh1.81 a litre to Sh43.96.
Fuel prices vary in other parts of the country, depending on the distance from Mombasa port as transport cost is included.
IMPORT COSTS
The
ERC attributed the variation in the price movements of petrol, diesel
and kerosene to different import costs of the commodities.
“The
international prices of petrol were lower when we procured the
consignment in February, hence the drop,” ERC acting director of
Petroleum Edward Kinyua said on phone.
“The prices of diesel and kerosene were marginally up during that period, hence the increases.”
There
is a lag of between 30 and 45 days between placing of supply orders and
the actual delivery of consignments at the port meaning local prices do
not immediately reflect global market trends, but are at least one
month behind.
Import cost of petrol dropped 11.9 per cent in the review period, while that of diesel rose by 3.7 per cent.
Kenya
buys refined petroleum products after its sole facility, the Kenya
Petroleum Refineries Ltd, in Mombasa was shut down in September 2013.
The
country bought its current petroleum stocks in February when crude
prices stood at $33 a barrel, up from $29.9 a month earlier.
Crude
shot to $38.2 in March, the period which the country bought the
consignment to be reviewed next month for consumption, signalling a
price increase.
A barrel is equivalent of 159 litres of petroleum. Global oil prices are now around $40 a barrel.
ERC FAULTED
Consumers
and the World Bank have in the recent past faulted the ERC’s monthly
pricing of petroleum, arguing that price controls have denied consumers
full benefits of the plummeting crude prices.
But ERC
has maintained that the import cost of refined petroleum varied from
that of crude, hence the disparity. The prices are also determined by
the forex exchange.
Petroleum prices have a bearing on
inflation because they affect operation and production costs of
manufacturing, agriculture and transport.
Producers, who rely on diesel, often respond to the cost movements by increasing retail prices of their products and services
No comments :
Post a Comment