Posted On: 13-03-2025
FUEL PRICES HIKE! HOW WILL IT AFFECT YOU?
The Energy and Petroleum Regulatory Authority (EPRA) has announced an increase in fuel prices, with petrol prices inclining by Sh7.80 per litre. This surge is primarily due to increased margins for oil marketing companies and transporters, aimed at reflecting current business conditions. Implementation of these new charges will be done gradually.
The regulator increases compensation to various players along the value chain. The breakdown of price increases is as follows;
- Oil marketing companies’ margins- increase by Kshs 4.59 per litre
- Finance Surcharge-an incline of Kshs 0.69 per litre
- Wholesalers margins-a rise of Kshs 1.64 per litre
- Transport margins had an increase of Kshs0.64 per litre
- Secondary storage tariffs-a rise of Kshs0.235 per litre
The adjustments have similarly led to the rise of prices in diesel and kerosene by Kshs 7.75 and Kshs 7.67 respectively. Below are the current fuel prices in Nairobi:
- Petrol-Kshs 176.58 per litre
- Diesel-Kshs 167.06 per litre
- Kerosene-Kshs 151.39 per litre
These increases in prices are expected to contribute to higher inflation, affecting transportation, agriculture, power generation, and household energy prices. EPRA plans to implement these changes gradually to mitigate the immediate impact on consumers. Fuel tankers are essential for maintaining a steady petroleum supply and transporting fuel from depots to petrol stations. The additional charges would be phased as to avoid a sharp increase in pump prices and would align with periods of declining global prices.
The Energy Committee has recommended that the Cabinet Secretary for Energy and Petroleum initiate amendments to Section 4(2) of the Petroleum Development Levy Fund Act, CAP. 426. These changes would designate the Principal Secretary in charge of Petroleum as the fund administrator to enhance transparency and accountability in fund management, with a deadline set for June 30, 2025.
However, challenges persist in the journey toward oil exports. Tullow, the company that discovered oil in Lokichar, Turkana County, in 2012, continues to face difficulties in securing investors and addressing financial constraints.
The government has granted Tullow a six-month extension until December 2024 to resolve these challenges. However, energy officials have expressed concerns over the company’s financial and technical capacity, particularly following the withdrawal of its partners.
Kenya’s ambition to export oil remains dependent on overcoming major infrastructure and logistical obstacles.
Reach out to Zurit, consulting for financial inquiries.