Kenyan consumers will enjoy a slight decrease in petroleum pump prices following yesterday’s review by the Energy Regulatory Commission (ERC) that saw Super Petrol, Diesel and Kerosene decrease by Sh 0.86, Sh 1.16 and Sh. 0.23 per litre respectively in Nairobi.
Prices for the rest of Kenya will drop by more or less the same margins starting today.
However, the costs will vary depending on the distance of the point of purchase relative to the source of the products. The commodities are usually cheaper in Mombasa and prices increase as they get into the mainland.
This is good news to the country that is facing the highest inflation rate in recent times, with prices for basic food stuffs like maize flour, sugar and milk increasing by up to 100 per cent
The cost of fuel is major catalyst to changes in the cost of commodities due to its knock-on effect, particularly when the prices go up, as most manufacturers and retailers pass the burden to consumers.
According to the Kenya National Bureau of Statistics (KNBS), the Consumer Price Index (CPI) increased by 0.75 per cent from 186.24 in April to 187.64 in May as the overall year-on-year inflation hit 11.70 per cent in last month
There was a panic before the prices were announced yesterday, with some experts warning that the prices might soar further, considering the current diplomatic spat in the Persian Gulf region Gulf, a key global oil market.
Earlier this month, nine countries including Saudi Arabia, The UAE, Egypt, and Bahrain cut diplomatic ties with Qatar and imposed financial embargoes of varying severity.
The announcement was the culmination of a feud that had been simmering for years. The nine countries accused Doha of assisting terrorist organizations, providing support for the Muslim Brotherhood and of being far too cozy with Iran.
A statement from ERC attributed the lower price to a decrease in the average landed cost of imported super petrol which decreased by 0.77 per cent to $564.53 (Sh58, 000) per tonne upon delivery in Mombasa.
A stronger shilling is also another factor that necessitated the decline in pump price. According to ERC, he mean monthly US dollar – Kenya shilling exchange rate appreciated by 0.01 per cent from Sh103.33 per dollar in April, to Sh103.31 per dollar in May, lowering importation costs.
The country will now wait and see if the lower petroleum pump price will have an effect on other commodities in the market.