Kenyans should now expect a reprieve in the cost of living after a decrease in the retail pump prices of petroleum products across the board.
The Energy Regulatory Commission, which announced a reduction in retail pump prices of petroleum products Saturday, cited a stronger Kenyan shilling against the dollar and the relatively lower prices of crude oil in the international market.
“Recently, the local currency has strengthened relative to the US dollar and this has impacted positively on the local pump prices.
"Over the same period, the mean monthly exchange rate improved to Sh86.79 per US dollar in December 2011 from Sh93.64 per US dollar in the previous month, a change equivalent to 7.32 per cent,” the regulator said in a statement.
ERC said the maximum allowed price of super petrol in Nairobi decreases by Sh7.11 per litre, while the pump price of diesel decreases by Sh3.08 per litre and the pump price of Kerosene reduces by Sh3.63 per litre, with maximum prices for other towns adjusted accordingly. The new prices will take effect until February 14 next month.
This means that super petrol in Nairobi will retail at Sh11.95 per litre while diesel will sell at Sh107.90 and kerosene will retail at Sh87.11.
The Commission, however, warned that it would impose a maximum fine of Sh1 million and/or revoke the operating license of any petroleum dealer who sets their retail prices beyond the maximum that the commission has set.
“The purpose of the fuel pricing regulations is to cap the pump prices of the products, which are already in the country, such that the importation and other prudently incurred costs are recovered while ensuring fair prices to the consumer,” the statement read.
Last week, major oil marketers told Nation on phone that delays in discharging of petroleum products after delivery at the depot in Mombasa will continue hurting their profit margins, after ERC had indicated it would announce a reduction in petroleum prices by between Sh3 and Sh7.
The marketers said such delays arising from absence of several jetties, which cause them huge losses, are often not factored in the price determinant formulas, exposing them to marginal profits.
“The only thing, which players have been vying for is for such factors like delays in discharging of the petroleum products to be factored in the formula to determine the real cost before price adjustments are arrived at,” Total Kenya spokesperson told Nation on phone.
Source: Nation media (Daily Nation)
Article by Joshua Masinde
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