15 February 2013

Kenya: Diesel, Kerosene to Cost More After Price Review

LOW income earners, farmers and transporters are headed for a tough month following the latest fuel price review in which kerosene and diesel prices rose by the highest margin.

Kerosene which is used for lighting and cooking in most low income and rural households will be sold at a maximum of Sh85.93 per litre in Nairobi while diesel will be sold at Sh106.20 after their prices rose by Sh2.07 and Sh2.21 respectively.

Diesel is used by public service vehicles and tractors used for farming and its increase therefore signals higher operating costs for PSV entreprenuers and farmers, amid the current planting season.

Super petrol prices in Nairobi rose by Sh1.97 and will thus retail for Sh113.57 in this area.

The monthly fuel price review by the Energy Regulatory Commission attributed the increase to a weaker shilling, higher delivery costs and moderate increase in international fuel prices.

A barrel of oil rose to $112.05 in January from an average of $110.75 in December. Total import cost for diesel rose by 0.43 per cent to $975.23 per tonne from $971.04 in December; for super petrol rose from $1044.25 per tonne to $1054. Only the import cost of kerosene dropped by 1.07 per cent to $1031.96 in January from $1043 per tonne earlier.

"Over the same period, the mean exchange rate deteriorated marginally by 1.17 per cent to Sh87.01 per dollar in January 2013 compared to Sh86 per dollar in December," said the ERC in a statement yesterday.

Super petrol will retail highest in Mandera at Sh126.09 per litre while in Eldoret, Mombasa, Nakuru and Kisumu, it will be sold at Sh115.27, Sh110.32, Sh114.16 and Sh115.33 respectively.

Diesel in the major cities will go for Sh102.96 in Mombasa, Sh107.01 in Nakuru, Sh108.12 in Eldoret and Sh108.18 in Kisumu. In Mandera it will be most expensive at Sh118.72.

Kerosene will be sold at Sh83.14, Sh86.69, Sh87.72 and Sh87.71 in Mombasa, Nakuru, Eldoret and Kisumu respectively.This is the second increment in fuel prices after a drop in December when a litre of super petrol was priced at Sh112.61 after being cut by Sh1.07.

The new latest review signals a likely increase in cost of living with most producers and business likely to pass on the extra cost to consumers.

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