ERC slashes pump prices second straight month in quarter 1 of 2016

FUEL prices fell by between Sh2.14 and Sh8.82 in the monthly review by the Energy Regulatory Commission announced Sunday afternoon on continued drop in global crude oil prices because of over-supply.

The ERC slashed prices of petrol, diesel and kerosene by an average of Sh2.14, Sh8.82 and Sh6.51 per litre, respectively.

In the new prices effective this morning, a litre of Super petrol, mainly used by motorists, will retail at a maximum Sh83.20 in Mombasa from Sh85.34, Sh86.50 from Sh88.64 in Nairobi and Sh88.47 from Sh90.60 in Kisumu.

Mandera motorists will pay the highest pump price at Sh100.31, a drop from Sh102.45 per litre.

Consumers of diesel, mainly used in agricultural machinery, manufacturing and transportation, are the biggest winners in the February-March review, with the price per litre set to sell for a maximum of Sh64.63 in Mombasa down from Sh73.43.

The commodity will retail at Sh67.88 in Nairobi from Sh76.7 and Sh70.05 in Kisumu from Sh78.85.

Mandera will again pay the highest at the pump due to its distance from the port of Mombasa at Sh81.68 from Sh90.51 a litre.

Households have also gotten a slight relief after the cost of Kerosene, mainly used for lighting and cooking in poor homes, was reduced to Sh36.94, Sh39.62 and Sh41.54 a litre in Mombasa, Nairobi and Kisumu.

This is down from Sh43.44, Sh46.13 and Sh48.03 in the respective cities.

ERC attributed the price drop to a fall in the average cost of imported refined petroleum products.

According to ERC, the free on board price of Murban crude oil lifted in January 2016 was posted at $29.95 (Sh3,064)per barrel, a 19.60 per cent drop from $37.25 (Sh3,808) per barrel last December.

Kenya imports refined petroleum products with a lag time of one month, since closing her refinery in September 2013.

Over the period, ERC said, the shilling depreciated marginally against the dollar by 0.10 per cent from an average of 102.23 in December to 102.33 in January.

“The drop in crude oil prices contributes to the drop in local pump prices. However, the relationship between the two is not linear and a host of factors influence the final price of refined products,” ERC director general Joseph Ng’ang’a said in a statement.