Rewrite this article and make it longer
Stabilisation saves consumers from new record-high fuel pricesThe State has stabilised fuel prices by up to Sh19.82 per litre even as pump prices dropped marginally, offering a slight reprieve to consumers beset by the high cost of living.
The Energy and Petroleum Regulatory Authority (Epra) kept the price of a litre of petrol unchanged on Tuesday and cut that of diesel and kerosene by Sh2 each in the monthly pricing cycle that will run to December 14, 2023.
Read: Rising fuel prices hand CBK a fresh inflation headache
Super petrol will continue to retail at Sh217.36 per litre in Nairobi while the price of diesel and kerosene has dropped to Sh203.47 and Sh203.06 respectively. This is after the government stabilised the prices of petrol, diesel and kerosene by Sh12.01, Sh19.82 and Sh3.64 per litre respectively.
But the pump prices are still at sky-high levels in what looks set to keep the cost of goods and services high in the diesel-powered economy, especially in sectors such as manufacturing, transport and power generation.
“In order to cushion consumers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilise pump prices for the November - December 2023 pricing cycle. The National Treasury has identified resources within the current resource envelope to compensate oil marketing companies,” said Epra.
The use of the stabilisation came in the period the average landed cost of imported super petrol rose by 2.81 percent to $827.75 (Sh125,776) per cubic metre while that of diesel rose by 3.28 percent to $873.42 (Sh132,716). A cubic metre of kerosene dropped at 6.31 percent to $813.9 (Sh123,672).
Without the stabilisation, Epra said a litre of petrol would have hit a record Sh229.37 while a similar quantity of diesel and kerosene would have jumped to Sh223.29 and Sh206.70, hitting consumers further.
Kenya imports all its petroleum products in refined form and the products are traded in international markets based on a pricing benchmark provided by the S&P Global Platts.
The international petroleum prices as provided by S&P Global Platts dropped in October but Epra used the prices of September in its pricing, leading to the rise in the pump prices which eventually required stabilisation to save consumers from another record-high pump price.
this review, the cargoes that have been factored were priced basis the average September 2023 Platts prices which was much higher than October 2023,” said Epra.
“These are the cargoes that had discharged at the Port of Mombasa between the 10th day of October 2023 and the 9th day of November 2023 in line with the provision of the Petroleum (Pricing) Regulations, 2022.”
The regulator quoted the exchange rate of the shilling against the dollar at 155.64 units, continuing to reflect a weaker position for the local currency when compared to the official average rate quoted by the Central Bank of Kenya (CBK).
Read: Oil dealers face funding pressure on high fuel prices
CBK currently says the shilling is exchanging at an average of 151.84 units to the dollar. A weaker local currency adds to the import cost, which is passed to the consumer.
Stabilisation saves consumers from new record-high fuel pricesThe State has stabilised fuel prices by up to Sh19.82 per litre even as pump prices dropped marginally, offering a slight reprieve to consumers beset by the high cost of livin | #Economics and trade
