14 June 2017

Kenya: Fuel Prices Fall Slightly in June Review

Kenya's energy regulator has announced a marginal drop in fuel prices starting Thursday

The slight fall is attributed to the decline in the landed cost of petrol, diesel and kerosene recorded in May.

Petrol pump prices in Nairobi will now stand at Sh98.73 per litre down from Sh99.59 last month, the Energy Regulatory Commission (ERC) announced.

Diesel, which was retailing at Sh88.05 per litre in May, will now sell at Sh1.16 less while kerosene will retail at Sh65.05, down from last month's Sh65.28 per litre.

ERC Acting Director-General Pavel Oimeke said the drop in landed cost of the three products caused the marginal drop.

Strong currency

A marginal strengthening of the local currency was also attributed to the slight drop in prices.

"Over the same period, the mean monthly US dollar to Kenya shillings exchange rate appreciated by 0.01 per cent from Sh103.33 per USD in April 2017 to Sh103.31 per USD in May 2017," Mr Oimeke wrote in the monthly price announcements.

Crude oil prices also fell for the fourth month in a row, triggering the downward trend with the latest from April's $53.4 per barrel to $51.45 in May.

Last month, pump prices rose slightly after the weighted average cost of imported petroleum products arriving at the Mombasa port between March and April went up.

The average landed cost of super petrol increased by 0.94 per cent from $563.62 per tonne in March 2017 to $568.92 per ton in April 2017.

Diesel decreased by 2.20 per cent from $504.83 per tonne to USD 493.72 while the average landed cost of kerosene increased by1.93 per cent from $497.44 to $507.02.

Since Kenya fully relies on imported fuel, the landed cost is affected by fluctuations in exchange rate between the Kenya shilling and the US dollar.

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