The Energy and Petroleum Regulatory Authority (EPRA) last night reported that various levies have pushed petroleum product prices significantly higher, with petrol alone experiencing an increase of at least Ksh.95.71 per liter.
This surge has driven the pump price of super petrol in Nairobi to a staggering Ksh.211.64, up from a landing cost of Ksh.115.93.
The situation is no less dire for diesel, with charges surging by Ksh.83.36 per liter, leading to a price of Ksh.200.99. Kerosene has also seen an increase of Ksh.78.83 per liter, reaching a price of Ksh.202.61. EPRA asserts that, without these levies, the landing costs for these products would be capped at Ksh.115.93 (super petrol), Ksh.117.63 (diesel), and Ksh.123.78 (kerosene).
Data released by EPRA underscores the burden of fuel prices, revealing that the existing 16 percent Value Added Tax (VAT) on petroleum products, coupled with the road maintenance levy, which added Ksh.18 per liter to petrol and diesel, and the anti-adulteration levy, which raised kerosene prices by Ksh.18, are key contributors to this crisis.
Moreover, additional taxes such as exercise duty, the petroleum development levy (formerly allocated to the controversial fuel subsidy), railway development levy, and the import declaration fee have all contributed to the soaring fuel prices.
EPRA has disclosed that oil marketing companies (OMCs) are set to profit, with Ksh.12.39 per liter for petrol, and Ksh.12.6 per liter for diesel and kerosene. The petroleum development levy will consume at least Ksh.5.40 per liter for diesel and super petrol.
Furthermore, EPRA Director General Daniel Kiptoo pointed to the year-on-year decline of the Kenyan shilling against the US dollar, which has made refined oil purchases more expensive. This external factor currently limits the government’s ability to exert control over fuel prices.
Kiptoo stated, “The average landed cost of imported Super Petrol increased by 4.80 percent from USD 739.21 per cubic meter in July 2023 to USD 774.67 per cubic meter in August 2023. Diesel increased by 12.52 percent from USD 701.99 per cubic meter to USD 789.89 per cubic meter, while Kerosene increased by 19.79 percent from USD 690.58 per cubic meter to USD 827.26 per cubic meter.”
He also mentioned that inflation has contributed to the challenge of lowering fuel costs, as Kenya’s inflation rate for August stood at 6.7 percent, down slightly from the 7.3 percent recorded in July.
The implications of these skyrocketing fuel prices are far-reaching, potentially affecting the prices of various goods, including food commodities, which had seen a reduction in prices in August compared to July, according to data released by the Kenya National Bureau of Statistics (KNBS).
Yesterday’s fuel price surge threatens to reverse this trend and poses significant economic challenges for Kenyan citizens.
