Fuel prices unchanged for the fourth month

The hold in fuel costs is attributable to the continued deployment of the petrol price stabilisation mechanisms which utilizes funds drawn from the petroleum development levy (PDL).

The utilisation of the mechanism has served to offset rising cost of landed petroleum with diesel and kerosene imports for the month of January jumping by 7.11 and 7.04 per cent respectively.

As such, a litre of petrol will continue to cost Ksh.129.72 per litre in the Capital Nairobi while diesel and kerosene will retail at Ksh.110.60 and Ksh.103.54 respectively.

The National Treasury is expected to compensate oil marketing companies (OMCs) supplier margins which remain nil in the next 30-day fuel pricing cycle to March 14.

The hold in fuel costs is expected to hold off further increments to the cost of living/inflation even as food prices continue to edge upwards.

Last month, inflation fell to a 14-month low 5.39 per cent on low transport and energy costs.

Upward pressure on fuel prices is however expected to persist in coming months with global oil prices touching eight-year highs in recent weeks as supply constraints dawn on the sector.

In the week ending February 10 for instance, Murban oil prices rose to $92.74 (Ksh.10,535) from $90.14 per barrel previously.

The rising global oil prices are expected to put pressure on the shilling, widening the country’s current account deficit (CAD).

The continued deployment of the petrol-price stabilisation mechanism is however likely to spare Kenyans from the fallout from higher global crude prices.