Petrol prices rise by 77 cents, diesel and kerosene costs unchanged again

Petrol costs have risen by 77 cents a litre in the latest maximum pump price review by the Energy and Petroleum Regulatory Authority (EPRA) on Monday.

Meanwhile, diesel and kerosene prices remain unchanged for a third consecutive month since April 14.

The one sided adjustment to petroleum costs by EPRA is largely attributable to the operation of a price stabilization scheme by the Ministry of Petroleum to cushion Kenyans from greater fuel costs.

The general hold in petroleum costs is for instance against a 1.52, 5.08 and 4.41 per cent hike in the landed cost of super petrol, diesel and kerosene respectively.

However, the operation of the price stabilization scheme is technically illegal there being no regulations to guide the use of funds collected in the form of levies from consumers.

Nevertheless, the Ministry has defended the operation of the fund without the pre-requisite provisions arguing the overall good for Kenyans who continue to lament over runway fuel costs in the country.

Subsequent to Monday’s review by EPRA, the cost of petrol in Capital Nairobi is expected to shoot up to Ksh.127.14, a new all time high.

Meanwhile, diesel and kerosene costs will remain at a flat Ksh.107.66 and Ksh.97.85 respectively.

Oil Marketing Companies (OMCs) have taken a haircut from earned supplier margins in the distribution of diesel and kerosene with EPRA lowering the profit points to Ksh.8 and Ksh.6.04 from a higher Ksh.11.72 and Ksh.8.93 respectively.

The marketers will be subsequently compensated through funds from the National Treasury.

While appearing before the Senate Energy Committee on Monday, Petroleum Cabinet Secretary John Munyes said regulations to govern the operation of the stabilization fund are almost complete to continue cushioning Kenyans from the high fuel costs.

“The Minstry of Petroleum and Mining in conjunction with EPRA have finalized draft regulations to operationalize the Petroleum Consolidated Fund stipulated in the Petroleum Act 2019 and meant to cater for creation and maintenance of strategic stocks,” he said.

“Further the team has also finalized draft regulations that provide a governance framework for the Petroleum Development Levy intended for among other functions stabilization of pump prices.”

In its second 2020/21 budget supplementary estimates, Treasury sort the approval of Ksh.1.4 billion as payment to OMCs for the operation of the fund across April and May.

In a phone interview with Citizen Digital on Friday, Petroleum Principal Secretary Andrew Kamau defended the move to operate the fund before the final adoption of regulations.

Its fine, somebody can challenge it and then he or she can explain to the over 40 million Kenyans on why they should be paying more for fuel,” he said.