Joseph Bonyo
30 October 2008
Nairobi — Oil firms on Thursday dropped oil prices by Sh5 only a day after the Government announced plans to re-introduce price controls in the sector.
Most stations around Nairobi were selling petrol at between Sh94 and Sh93 per litre, down from as high as Sh98 the previous day in some stations.
Diesel dropped to Sh88.90 per litre. However, the prices are still Sh3 above government expectations.
Energy minister Kiraitu Murungi had on Wednesday promised to make major changes aimed at forcing the oil firms to reduce pump prices.
He had indicated that he would fix the price at no more than 7 per cent per litre based on the prevailing cost per barrel.
But in quick reaction seen as pre-emptive measure, oil multinationals operating in the country attributed the reaction to price reduction in the world market.
"We have started selling the stocks that we procured when world markets were stumbling. This is purely a market trend that we have always observed," noted an industry player who sought anonymity.
The official of a local multinational declined to be named, saying that the prices were yet to be communicated officially.
According to him, the firm had dispatched its sales representatives across the country to ensure the reduction is effected.
While the drop in petrol was pegged at Sh5, a litre of diesel was adjusted by Sh8 and will now be selling at Sh88.90.
Speaking on phone to the Nation, Shell Kenya external affairs manager Mwaura Ngari, said they expected a complete reduction by Sunday.
"Most of our dealers can hold up to two to three days of stock, they should exhaust that and effect the reduction by Sunday," he said.
Internationally, crude oil prices have fallen by 55 per cent from a peak of $147 a barrel in July to $65 on Thursday.
Local players in the industry have been reluctant to reduce prices citing holding stocks. However, pressure has been mounting for them to effect the reduction.
The cost in Western Province and the Mount Kenya region is expected to be Sh2 higher than in Nairobi.
Be the first to Write a Comment!
Copyright © 2008 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
