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                              Why Fuel Prices Shot Up to a Record High

                              Fuel prices have crossed the Ksh 200 mark for the first time in Kenya's history.

                              Ndungu Chiuri by Ndungu Chiuri
                              September 15, 2023
                              A national Oil Petrol station in Kenya.

                              A national Oil Petrol station in Kenya.

                              The Energy and Petroleum Regulatory Authority (EPRA) on Thursday, September 14, announced its monthly fuel review that has set prices at an all-time high.

                              According to the monthly review report, Super Petrol will retail at Super Ksh 211.64 in Nairobi while the prices of Diesel and Kerosene were set at Ksh 200.99, and Ksh 202.61 respectively. 

                              In its explanation, EPRA cited increased landing costs, which includes the cost of the product and shipping, as a factor for the increase in the prices.

                              To further break it down, the energy regulator noted that the landing cost of Super Petrol increased from $739 per cubic meter in July to $774.67, which is a 4.80% increase.

                              Additionally, the landing cost of diesel increased from $701.99 per cubic meter to $789.89 (12.52% increase), while that of petrol rose from $690.58 to $827.26 (19.89% increase).

                              Energy Cabinet Secretary Davis Chirchir (left) and EPRA Director General Daniel Kiptoo addresses a past press conference.
                              Energy Cabinet Secretary Davis Chirchir (left) and EPRA Director General Daniel Kiptoo addresses a past press conference in Nairobi.

                              Further, the new prices are inclusive of the tax measures instituted through various laws including the Finance Act 2023 which imposed VAT of 16% on petroleum products.

                              Global fuel crisis

                              The landing costs reported in the EPRA report reflect the current rise of fuel prices across the world.

                              In a statement on Thursday, EPRA Director General Daniel Kiptoo explained that global fuel prices were bound to increase citing the move by petroleum producing countries to slow down oil production.


                              Also Read: EPRA Increases Fuel Prices; Petrol, Diesel, Cross Ksh200 Mark


                              In July, Saudi Arabia and Russia- both members of the Organization of Petroleum Exporting Countries (OPEC) agreed to cut down on exports of crude oil, a move that has since had a ripple effect on the global prices.

                              Notably, both Russia and Saudi Arabia have affirmed intentions to sustain the production cuts until the end of 2023. 

                              Delayed Pain 

                              Unlike in its previous review in the month of August, the stabilization fund meant to cushion the country against spikes in fuel prices, was not included in the review. 

                              In its review in August, EPRA utilized the Petroleum Development Levy fund and consequently the prices of fuel remained unchanged for the period between August 15 and September 14. 

                              At the time, EPRA explained that the stabilization was to save Kenyans Ksh 7.33 in the price of super petrol that would have otherwise hit the Ksh200 mark.

                              Ndii’s Harsh Truth

                              While reacting to the new prices, David Ndii, the chairperson of the President’s Council of Economic Advisors, responded to various concerns raised by Kenyans on X regarding the trend of fuel crisis.


                              Also Read: Ruto Brings Back Fuel Subsidy as EPRA Announces Pump Prices


                              In what appeared to be an indirect reference to the debt situation facing Kenya, Ndii expressed his fears that the challenges could be far from over.

                              He noted that, as much as the government was trying to solve the economic challenges, he could not guarantee a breakthrough.

                              “Maybe better, maybe worse who knows. We do what we think can work if it doesn’t too bad. Doctors lose patients all the time despite their best efforts,” Ndii stated in one of his posts. 

                              “This expectation that Kenya can abuse credit for a decade and the same people can make consequences go away painlessly just because there was a game of musical chairs we call elections?” he posed. 

                              Preident William Ruto (left) and EPRA Director General Daniel Kiptoo shake hands at a past event.
                              President William Ruto (left) and EPRA Director General Daniel Kiptoo shake hands at a past event. [photo/ Kiptoo]
                              Tags: EPRANational OilPetroleum

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                              Ndungu Chiuri

                              Ndungu Chiuri

                              Robinson is a digital journalist for The Kenya Times, dedicated to informing the public and telling compelling stories that impact people's lives. I am passionate about politics, current affairs, and feel-good stories that cover the achievements of individuals in society. With a skill set of modern trends in journalism, I am committed to upholding accuracy, independence, and objectivity in my practice to fit in the dynamic media space. He can be reached at ndungu.chiuri@thekenyatimes.com.

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                              Chairperson of the President's Council of Economic Advisors David Ndii. PHOTO/Courtesy.

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