Fuel consumption drops despite gov't efforts to lower prices

According to the Lead Economic Indicator by the Kenya National Bureau of Statistics (KNBS), petrol consumption dropped by four per cent, diesel by 2.5 per cent and kerosene by 41.29 per cent. 

In a breakdown, Kenyans consumed 938,300 metric tonnes of petrol from January to August 2023, a reduction from 984,330 metric tonnes consumed during the same period last year. 

For diesel, Kenyans consumed 3,675 metric tonnes less during the period in review while kerosene consumption fell by the biggest margin from 42,600 mt to 25,010 mt. 

The reduction in fuel consumption comes despite the drop in fuel prices in recent months. In October, data from EPRA showed that the pump prices dropped to the lowest level in 19 months, attributed to lower import costs. 

This meant that a litre of super petrol costs Ksh.180.66 in Nairobi, Ksh.168.66 for diesel and Ksh.151.30 for kerosene. 

The same figures were retained during the November 15 to December 14 review. 

Globally, oil prices dropped significantly leading to a reduction in fuel prices witnessed across the globe. 

Further, the drop in prices was also attributed to the strengthening of the shilling, which is currently Ksh.129.5 to the dollar from the highs of Ksh.160 witnessed at the beginning of the year. 

This was effected by the government-to-government arrangement which involved Gulf nations supplying oil to Kenya until a volume of fuel was exhausted. 

The deal allowed the government to purchase oil on credit and hence alleviating the pressure on the Kenyan shilling. 

Despite the drop in prices, Kenyans anticipated the reduction to be bigger had the government maintained the Road Maintenance Levy Fund (RML) at Ksh.18 per litre. 

The Fund, used to maintain public roads across the country, was increased from Ksh.18 per litre to Ksh.25 per litre in November. 

The State, however, reaffirmed to the public that the new rate would not increase fuel prices. 

“We are confirming to Kenyans that there will be no increase in the price of fuel. We have measures in place to increase the levy without increasing the cost of fuel beyond the current prices,” Roads PS Joseph Mbugua reassured.