Kenyans brace for fuel price hike as EPRA set to introduce new charges

The Energy and Petroleum Regulatory Authority (EPRA) now says that it will soon introduce additional charges on pump prices.

This is to cater for the ballooning costs shouldered by oil marketing companies and fuel transporters in the country.

The regulator says the decision comes as a result of findings and recommendations in the second Cost of Service Study for the petroleum sector.

Every five years, EPRA undertakes a cost-of-service study for the petroleum and electricity sub-sectors.

The first was undertaken in 2018, and the second has just concluded, and with it comes recommendations to add additional charges on petroleum products like petrol and diesel.

EPRA says this will ensure that the cost of petroleum products reflects the supply chain expenses.

"It is important that we reflect the market realities of today in the price-regulated environment,” said EPRA Director General Daniel Kiptoo.

EPRA Director of Economic Regulations, Dr. John Mutua, added, “Government usually has medium-term plans, so again, because a lot of fundamental issues in the economy may change, that’s why it’s important to review after every five years."

The 14-month study concluded in February this year and has been approved by policymakers and the board of directors at EPRA.

The impending implementation will see the prices of super petrol, diesel, and kerosene all go up.

Petrol, for instance, will see a jump of Ksh.7.80 per litre. These additional funds will go to oil marketing companies and petroleum transporters in the country.

"To use an example, we have transporters who have not had an increase since 2010, and it is today 2025—15 years. This is a question we need to ask ourselves as Kenyans: If those businesses close, it is your sister, a relative, a Kenyan who is going to lose a job, isn’t it? So, if we don’t do our role as a regulator to ensure we balance the interests of investors and consumers, tomorrow the question will be: where was the regulator when this business was shutting down or moving to other jurisdictions?" Kiptoo posed.

To cushion Kenyans from the impact of this looming hike, EPRA says the implementation of these new charges will be done gradually.

"We are looking at a mechanism where we implement the recommendations of this report in phases. We want to time it at a point when it will not impact the consumer negatively, and we want to apply it when petroleum pump prices are coming down,” said Kiptoo.

“We are seeing international Platts prices, which are not within our control, starting to decrease, so we see an opportunity where we will be able to implement these recommendations—even though it’s a margin increase—without necessarily increasing pump prices.”

The study was undertaken by Kurrent Technologies Limited in a joint venture with the UK’s Channoil Consulting Limited.