More cash in the pocket as ERC cuts fuel prices

Kenyans got an early Christmas gift yesterday following a reduction on fuel prices.

In changes announced by the Energy Regulatory Commission (ERC), the price of petrol dropped by Sh4.57 per litre and diesel by Sh0.55. Kerosene got the largest cut of Sh6.61 per litre in prices that will run till mid-January.

Motorists in Nairobi will from this morning pay Sh113.54 for a litre of super petrol, Sh112.28 for diesel and Sh105.22 for kerosene.

Consumers in Mandera will, however, continue to pay the highest cost for fuel in the country, at Sh126.3 for petrol and Sh110.91 for diesel — majorly due to the distance from Mombasa.

The coastal town’s residents will pay the lowest at Sh110.91 and Sh109.66 for petrol and diesel respectively.

The new prices, which come just days to Christmas, offer some relief to Kenyans who were set to have an expensive festive season due to the introduction of value added tax on petroleum products in September.

ERC attributed the significant drop in prices to a decrease in the landing cost of refined petroleum products and a dip in the global prices of crude oil.

“The changes in this month’s prices have been as a consequence of the average landed cost of imported super petrol decreasing from $758.34 (Sh77,730) per tonne in October 2018 to $694.34 (Sh71,170) per tonne in November,” said the regulator.

“Diesel decreased from $741.33 (Sh75,986) per tonne to $722.17 (Sh74,022) per tonne while kerosene decreased from $763.47 (Sh78,255) per tonne to $678.57 (Sh69,553) per tonne,” said ERC.

A weaker shilling however prevented the prices from dropping lower as expected. As much as global prices have fallen substantially, it costs importers more in shillings to buy the the dollars needed to import fuel.

The shilling yesterday closed the week at 102.5 to the dollar. Last month, it hit 103 at some point.

However, partly to take credit for the drop in prices is a push by US President Donald Trump to upset the Organisation of the Petroleum Exporting Countries, a cartel of rich oil producing states - which saw US become the world’s largest oil producing country this week.

The US has since August ramped up the number of crude oil barrels it produces per day.