In an announcement that will significantly impact Kenyan households, the Energy & Petroleum Regulatory Authority (EPRA) has unveiled new maximum retail prices for petroleum products. Effective from September 15, 2023, to October 14, 2023, these adjustments come as a response to global market dynamics and increased import costs.
The revised fuel prices for Nairobi are as follows: Super Petrol will see an increase of Sh.16.96 per liter, diesel will climb by Sh21.32 per liter, and kerosene will experience a notable surge of Sh33.13 per liter.
Consequently, the updated prices for these vital fuels in Nairobi will stand at Sh211.64 for Super Petrol, Sh200.99 for Diesel, and Sh202.61 for Kerosene. These prices already include the 16% Value Added Tax (VAT), adhering to the Finance Act 2023, the Tax Laws (Amendment) Act 2020, and the revised excise duty rates accounting for inflation, per Legal Notice No. 194 of 2020.
EPRA has attributed these price hikes to the rising cost of importing refined petroleum products. Specifically, the average landed cost of imported Super Petrol surged by 4.80% from US$739.21 per cubic meter in July 2023 to US$774.67 per cubic meter in August 2023. Diesel witnessed a more substantial increase of 12.52%, rising from US$701.99 per cubic meter to US$789.89 per cubic meter. Kerosene, extensively used in Kenyan households, experienced a staggering 19.79% increase, elevating the cost per cubic meter from US$690.58 to US$827.26.
This situation is compounded by Kenya’s reliance on importing all petroleum products in refined form, rendering the country susceptible to global oil price fluctuations and international market dynamics.
The announcement of these price increases comes at a challenging time for Kenyan citizens, who are already grappling with an elevated cost of living. Factors such as surging food prices and increased electricity tariffs have added to the financial burden.
These price adjustments have sparked mixed reactions from the public, with concerns over how they will affect daily budgets and financial stability. Businesses, especially those heavily dependent on fuel for transportation and power generation, are also preparing for higher operational costs. This includes sectors crucial for the nationwide distribution of goods, like transportation and logistics.
The EPRA’s decision to increase fuel prices will inevitably require Kenyans to allocate more of their budgets towards commuting and essential services. These increments, taking effect on Friday, September 15, 2023, mark a significant milestone as fuel prices breach the Sh200 mark.
As conversations about the economic impact of these changes continue to circulate, we will provide ongoing updates on how these adjustments are affecting both businesses and consumers.
Photo source: Citizendigital
By: Montel Kamau
Serrari Financial Analyst
15th September, 2023
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