Energy Regulatory Commission have reviewed pump prices and reduced them in line with global trends:
Below is their press release statement first seen on their website:
“The Energy Regulatory Commission has calculated the maximum retail pump prices of petroleum products which will be in force throughout Kenya from 15th February 2016 to 14th March 2016.
The drop in crude oil prices does influence local pump prices but the relationship between the two is not linear because various factors affect the final price of refined products. Those factors include the demand and supply of specific refined products in the world.
It is worth noting that crude oil and refined products are traded in completely different markets and hence their pricing are different. Since Kenya has been an importer of refined petroleum products from September 2013, the movement of local retail pump prices reflects the price of refined products in international markets. Consequently, the use of crude oil benchmarks to analyze retail pump prices locally can be misleading.
For instance, super petrol has recorded a gradual decline in prices compared to the sharp drop in prices of diesel and kerosene. Putting it into perspective, the price of super petrol in the international market dropped by 8%, while diesel and kerosene recorded a decrease of 24% and 21% respectively in January 2016 compared to December 2015. It is also important to note that the pump price of super petrol has higher taxes and levies compared to diesel and kerosene.
Taking account of the weighted average cost of imported refined petroleum products, the changes in the maximum allowed petroleum pump prices are as follows: Super Petrol reduces by KShs 2.14 per litre, Diesel reduces by KShs 8.82 per litre while Kerosene reduces by KShs 6.51 per litre.
The average landed cost of imported Super Petrol decreased by 4.22% from US$ 518.63 per ton in December 2015 to US$ 496.74 per ton in January 2016. Further, the average landed cost of imported Diesel during the period decreased by 21.80% from US$ 439.25 per ton to US$ 343.49 per ton. In addition, the average landed cost of imported Kerosene decreased by 20.23% from US$ 402.87 per ton to US$ 321.37 per ton.
The Commission wishes to assure the general public of its continued commitment to the observance of fair competition and protection of the interests of both consumers and investors in the energy sector. In this respect, consumers are requested to be vigilant in reporting non-compliant retailers to the authorities for necessary legal action.”
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Source: Energy Regulatory Commission
