Energy and Petroleum Regulatory Authority (EPRA) Director General Edward Kinyua has said fuel prices may continue to fluctuate monthly due to changes in global oil prices and shipping costs.
Speaking during an interview with Radio 47 on Thursday, October 22, Kinyua explained that Kenya imports refined fuel, meaning changes in the international oil market directly affect the prices motorists pay at petrol stations.
“Today if you check, the price of crude oil is 108 dollars per barrel, and we know very well that in January this year the price was about 60 dollars,” he said.
Kinyua added that crude oil prices had reached Ksh20,376 ($157) per barrel when the United States-Israel-Iran war was at its height, putting pressure on fuel prices.
A man fueling a car at a petrol station
Photo
New Vision
He explained that EPRA uses a set formula to calculate fuel prices and cannot simply fix the prices without considering the costs of importing petroleum products.
“When the oil at the international market goes up, we also raise it. When it comes down, we reduce the prices,” Kinyua said.
The clarification comes a week after EPRA increased petrol prices by Ksh12.93 per litre, diesel by Ksh9.90 and kerosene by Ksh28.49 amid tensions in the Middle East.
Following the increase, Super Petrol is currently retailing at Ksh226.96 per litre in Nairobi, while diesel costs Ksh227.76 and kerosene Ksh219.87.
Kinyua said the government had spent Ksh243 billion from the Petroleum Development Levy Fund (PDL) since April this year to cushion Kenyans against rising fuel prices.
He added that the government had also reduced Value Added Tax (VAT) on fuel from 16 per cent to 8 per cent to prevent prices from rising further.
“It means if there had not been these interventions, the price could have soared even higher,” he said.
The EPRA boss explained that fuel prices are affected by the cost of buying petroleum products from suppliers, loading them onto ships and transporting them to Kenya.
He further noted that the expenses are included in the landed cost of fuel, which helps determine the final price at the pump.
Kinyua noted that Kenya stopped refining fuel locally in 2013 and now imports refined petroleum products, making the country dependent on international suppliers.
He also said the pricing process follows Legal Notice No. 182 of 2022, which requires the costs passed on to consumers to be reasonable and justified.
Motorists at a petrol station in Kinoo along Waiyaki Way on January 7, 2023.
Kenyans.co.ke