The proposed transport and storage tariff hike by the Kenya Pipeline Company (KPC) is expected to rocket oil prices by at least 54 cents per liter in Nairobi.
KPC has subjected this projection to public participation in partnership with the Energy and Petroleum Regulatory Authority (EPRA). Public participation on the proposed tariffs will be concluded today after which the duo will retreat to come up with final tariffs expected before October when current tariff rates lapse.
Nakuru’s fuel price is expected to rise by 42 cents at the end of the review period in June 2025 while the price will rise by 29 cents a liter in Kisumu and Eldoret.
The difference in fuel price hike is due to disparities in the unbundling of transport and storage as well as loading tariffs which were formerly enjoined.
In its proposal to the Energy and Petroleum Regulatory Authority, KPC requests to raise its composite tariffs by an initial 13 per cent to Ksh.5.22 per cubic meter/kilometer from the current Ksh.4.61 in the 2022/23 financial year.
Storage tariffs in Nairobi are expected to rise to Ksh.3,271 per cubic meter from the current Ksh.2.853 and to Ksh.3,957 from Ksh.3,669 in Eldoret. The storage tariff charged at the Konza depot is however expected to fall to Ksh.1,479 per cubic meter from Ksh.1,761 at present.
The contribution of the KPC tariffs on average pump prices is anticipated to stand at 1.3 per cent for petrol in Nairobi and at 1.8 and 2.3 per cent in Nakuru, Eldoret and Kisumu.
Currently, Kenyans are paying a mean of Ksh3.62, Ksh.3.23 and Ksh.3.22 per liter for the storage and distribution of super petrol, diesel and kerosene respectively. KPC’s move to seek higher tariffs seeks to cushion the State Corporation from losses occasioned by planned capital expenditure on projects.
In its 2020 annual report, KPC attributed a Ksh.5.4 billion revenue reduction to the downward revision of pipeline tariffs by EPRA, which went down by between 19 and three per cent for local sales and by between 48 and 33 per cent for export sales.
