Sh18 kerosene price rise to hit poor homes hard

A pump attendant fuels vehicles at Total Kimathi Street in Nairobi on May 14, 2020.

Summary

• A litre of the product will be sold Sh18.03 more per litre starting tomorrow to retail at Sh83.48 in Nairobi, up from the Sh65.45 per litre in July.
• The 24 per cent drop coincides with a double rise in kerosene use in June to 29.4 million litres from the 15.4 million litres in May.

By EDWIN OKOTH

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Kerosene will record the biggest jump in prices to be announced today following fresh importation of the product that has not been on fuel orders since April.

A litre of the product will be sold Sh18.03 more per litre starting tomorrow to retail at Sh83.48 in Nairobi, up from the Sh65.45 per litre in July.

Poor households

The July import, which comes after crude prices have recovered to an average of $43 per barrel, will result in a 28 per cent increase in prices of the product largely used by poor households to cook and in the manufacture of paint.

The jump will hit poor households hard, with a higher number having slid to the use of kerosene and reduced reliance on cooking gas, according to data from the Energy and Petroleum Regulatory Authority.

Increased use of kerosene, whose prices touched a three-year low of Sh62 per litre even as no import came in for three months, caused a shortage in various parts of the country, according to petroleum dealers.

Cooking gas consumption data covering the period when Kenya began implementing containment measures to curb Covid-19 shows the volumes dropped while use of kerosene rose, suggesting a possible switch by households to kerosene for cooking.

Dirty cooking option

The hard economic times as a result of health restrictions may have pushed households to the cheaper but dirty cooking option. The six-month data from January 2020 shows consumers bought 23,327 tonnes of cooking gas in June, compared to the May figure of 30,860 tonnes of the commodity.

The 24 per cent drop coincides with a double rise in kerosene use in June to 29.4 million litres from the 15.4 million litres in May.

“In the July /August cycle, no kerosene was discharged at the Port of Mombasa. Accordingly, the prevailing kerosene price has been maintained but adjusted for the under-recovery of Value Added Tax by oil marketing companies that occurred in the previous pricing cycle,” EPRA wrote in the monthly pump prices report released in July.

The new price jump is more than six times compared to the Sh2.98 per litre added in the pricing cycle ending today.

edokoth@ke.nationmedia.com