Kenya has most expensive fuel in East Africa despite maintaining pump prices

From November 15, 2024 to December 14, 2024, the Energy and Petroleum Regulatory Authority (EPRA) announced that a litre of petrol in Nairobi will cost Ksh.180.66, diesel will retail for Ksh168.66 and kerosene for Ksh.151.39. 

A spot-check by Citizen Digital shows that the same litre of petrol goes for Ksh.171 in Uganda, Ksh153.34 in Rwanda while it is the cheapest in Tanzania at Ksh.141.89. 

In contrast, the price for a litre of diesel is most expensive in Kenya, followed by Ksh.164.21 in Uganda, Ksh.155.50 in Rwanda and Ksh137.12 in Tanzania. 

The implications of the prices are based on different micro and macro economic factors such as international oil prices and foreign exchange rates. 

Globally, oil prices have fallen in the recent past due to reduced demand from China, the largest oil importer, and high United States Federal Reserve interest Rates. 

The Federal Reserve is a key player for global financial markets and hence investors have been anticipating for more interest rate cuts to stimulate economic growth in the US.

The interest rates have, however, continued to remain high, causing a reduced demand for oil.  

In Kenya, consumers are staring at a possible extension of the government-to-government arrangement that will see Gulf oil companies continue supplying the country until a required volume of fuel is exhausted. 

The deal allows the government to avoid paying penalties, a factor that might be passed to the consumer in the coming months.

However, pump prices in October dropped by the highest margin in 19 months; falling by Ksh8.18, Ksh3.54 and Ksh.6.93 for super petrol, diesel and kerosene respectively. 

For Uganda, the fuel prices reached the lowest in the past six months according to the Uganda National Oil Company (UNOC).

The country has capitalised on global oil price drops but the Ugandan State is eyeing to edge out external factors by developing its own refinery. 

"The stability of Iran might affect the prices globally, not just Uganda alone, And that is why we are pushing for the development of our own refinery, which means that even with these problems in the Middle East, we are still shock-absorbed by our own products in the country," UNOC Chief of Corporate Affairs officer Tony Oyoa told Daily Monitor. 

On its part, Tanzania records the cheapest fuel prices across the region, with its Regulatory Authority attributing this to global oil reduction and fluctuations in importation costs as well as foreign exchange rates. 

The same reasons were provided by the Rwanda Utilities Regulatory Authority (RURA) for the current fuel retail prices.