Expectations are that the Energy Regulatory Authority (EPRA) will once again review downward fuel prices at the next review, scheduled for 15th February 2024.
- EPRA is likely to base its current pricing on the prevailing international crude oil prices in November-December 2023.
- This follows a drop in the price of Murban, which has been on a decline in weeks since December 2023.
- According to the Weekly statistical bulletin by the Central Bank of Kenya (CBK), Murban oil prices declined to US$ 79.41 per barrel on February 8th compared to US$ 80.47 per barrel on February 1st 2024.
Murban crude, which is drilled from onshore fields in the emirate of Abu Dhabi, plays a significant role in the global energy landscape. EPRA pegs its monthly pricing cycles on the price of Murban crude.
Global fuel prices have been on a drop in recent months which analysts attribute to weak demand from a slowing economy in China and the USA. EPRA’s decision could be influenced by neighbouring Tanzania, which decreased the price of petroleum products by 1.07% at its latest review.
The Tanzanian Energy and Water Utilities Regulatory Authority (EWURA), decreased the price of a litre of petrol to Tsh 3,051 and Tsh 3,029 for a litre of diesel compared to TSh3,084 and KSh 3,078 for petrol and diesel respectively at the January review. Kenyan motorists have been driving to fuel in neighbouring Tanzania and other cheaper destinations to escape the relatively more expensive fuel pump prices in Kenya.
The February price review in Kenya comes at a time when the EPRA Director General, David Kiptoo, has announced that two more oil firms, One Petroleum Ltd and Asharami Synergy Ltd, have joined the government-to-government oil import deal, bringing the total number of participants to five.
Local oil markets continue to question the legality of the G-G arrangement, many claiming that its terms are still unexplained.
- The Finance Bill, 2023 introduced a 16 per cent VAT on petroleum products, a development that has increased the fuel pump prices in Kenya.
- At present, Diesel and Kerosene retail at KSh 207.36, KSh 196.47 and KSh 194.23.
- This is after EPRA lowered pump prices for Super Petrol, Diesel and Kerosene by KSh 5.00, KSh5.00 and KSh4.82 per litre respectively, at the last review.