Fuel prices come down

September 18, 2008
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, NAIROBI, September 18- Fuel pump prices have come down marginally in what is seen as the local marketers’ belated reaction to a drop in the international crude prices.

A spot check by Capital Business on Thursday revealed that a litre of premium petrol is now retailing at an average of Sh104 down from Sh109 last week.

Petroleum Institute of East Africa (PIEA) Chairman Eng Patrick Obath told Capital Business that Kenyans would, beginning this week, start to feel the impact of the new oil supplies that are coming into the market.

“This reduction will continue depending on when the next batches of products come in and the prices at which they are bought. This is part of the regular ups and downs that you get as the prices of crude in the global market fluctuate,” he added.
 
Obath defended the Sh5 reduction saying there are many factors, other than a drop in the global prices that affect the price of fuel in Kenya. “We should not forget that there is a lot of money tied up in un-refunded pacts with the government and depending on the movement of interest rates for example, that will also impact on the costs of prices of fuel in this country,” he stressed.

There has been uproar in the market with consumers calling for the immediate lowering of the prices. Earlier in the week, the Energy Regulatory Commission (ERC) had added its voice to those calling for an Sh8 per litre cut in the prices.

“Whereas the ERC has its views, the oil companies have their views as well depending on their operating costs,” Obath emphasized.

Consumers were further infuriated by Energy Minister Kiraitu Murungi’s attempts at downplaying the urge for low fuel prices.

“The obstinate reluctance by the Minister and oil firms confirms our fear that the government does not have the interest of consumers at heart,” said a statement from the Motorists Association of Kenya on Tuesday.

The Association Chairman Peter Murima also differed with Obath arguing that the local costs still do not reflect the changed scene in international prices. According to him, a litre of premium should go for Sh93 while that of diesel should be at Sh90.

“The global prices have gone down considerably and our plea is that the local pump should reflect the same,” he argued.

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