Fuel prices are set to lower in April or May, according to the Energy and Petroleum Cabinet Secretary Davies Chirchir.
The Cabinet Secretary for Energy and Petroleum announced that local retailers will begin selling imported oil at international market prices in April or May. This will mark the start of the relief that will be felt in the local market.
We bring our oil products into the country through an open tender system and we buy them on Platts pricing (latest market prices). But we do buy on M+2 (for two months from now) basis, so we’re now processing for April/May. We do not make spot purchases, to take care of the country’s security of supply. So, we’ll start seeing results of whatever is [currently] happening [in the international markets] two months from now.
Energy and Petroleum Cabinet Secretary – Davies Chirchir
Despite the drop in the cost of crude from $92.61 per barrel to $73.39 this month, Kenya’s petrol price has remained at about KES 177 ($1.419) per litre since November last year. Meanwhile, Tanzania offers the cheapest petrol prices in the region at $1.2 per litre, followed by Uganda at $1.35. Rwanda and DRC have set their rates at $1.417 and $1.39, respectively.
Although the Energy and Petroleum Regulatory Authority (Epra) set price caps on February 14 to recover importation and other prudently incurred costs while ensuring reasonable fuel prices to consumers, the regulator noted that the local currency’s 1.6 per cent depreciation offset the drop in crude oil prices.
To mitigate the impact of the “dollar pressure” on fuel prices, Minister Chirchir plans to establish government-to-government (G2G) partnerships with oil-producing countries in the Middle East, which is expected to bear fruit in April or May this year.
What we want to do with the G2G framework is to ensure that we are able to be allowed to defer payments for a few months, so that we do not create a major pressure on the foreign currency.
The Energy and Petroleum Cabinet Secretary – Davies Chirchir
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