Relief for motorists as petrol and diesel prices drop
Motorists will count relief for the first time this year as petrol and diesel prices fall in the Energy and Petroleum Regulatory Authority (EPRA) mid-month review of maximum pump prices.
Petrol users have seen the drop of Ksh.2 in costs per litre while diesel users see a higher relief of Ksh.2.80 in the cost of fuel.
Meanwhile, Kerosene users will continue to count relief for the third month running as their fuel costs per litre are cut by a further Ksh.7.23.
The changes in this month maximum cost to fuel follows the decrease in the average cost landed fuels in February with price of petrol orders declining by 3.4 per cent per cubic metre while that of diesel and kerosene decreasing by 5.3 per cent and 15 per cent respectively.
Motorists are set for another huge relief in fuel costs in the next review in line with the global slowdown in fuel costs with Saturday’s review only representing price corrections across the month of February in the international market alone.
“It is worthwhile noting that cargoes used in the computation of this month’s prices were procured in January and February 2020 when the crude oil price was still high. Accordingly, the effect of the recent crash in crude oil prices will be reflected in the subsequent pump price reviews,” noted EPRA in a statement.
Petrol will now retail at Ksh.110.87 per litre in Nairobi while the costs of diesel and kerosene falls to Ksh.101.65 and Ksh.95.46 per litre.
Globally, the Coronavirus outbreak has resulted in a dip in the demand of oil across markets as productivity and travel slows down leading to the correction of costs in the southward direction against higher supply.
According to predictions from the International Energy Agency (IEA) demand for oil is set to dip by at least 1.8 million barrels a day (bpd) from the trade disruptions with China reporting the greatest solo decline to new oil orders.
The sharp corrections have further been accelerated by a brewing oil pricing war between Russia and Saudi Arabia over suggested cuts to global supply to support oil prices under the Coronavirus pandemic.
Earlier this week, global oil prices hit lows seen last in 1991 as Saudi Arabia opted to raise supply in defiance to Russia’s own refusal to cut global supply to send fuel costs tumbling to a near Ksh.3075 ($30) per barrel.
The dispute is however of less concern to Kenya as a net oil importer as lower prices represent slowing inflation and narrower current account balances with the Central Bank of Kenya (CBK) hinting at the potential for ‘significant’ savings.
The new prices are expected to kick at midnight and will run to April 14 when the maximum fuel costs are set for an even greater downward review should the current average costs of about Ksh.3587.50 ($35) a barrel in the international market hold.