Driving gets expensive after fuel hike

March 14, 2011

, NAIROBI, Kenya, Mar 14 – Fuel pump prices have gone up by between Sh2.77 for diesel and Sh4.44 for super petrol per litre, after the Energy Regulatory Commission (ERC) adjusted the maximum prices in line with price control regulations.

This marks the fourth consecutive upward fuel price increase since the introduction of the regulations in December last year and the first time it has crossed the Sh100 mark.

Nairobi residents who account for more than 60 percent of the country\’s total petroleum market, will part with Sh102.44 for a litre of super petrol and Sh100.90 for diesel.

Residents in Mandera will pay the highest for a litre of super petrol at Sh113.98 and Sh112.44 for diesel.

ERC Director General Kaburu Mwirichia said on Monday that the international prices of crude oil and refined petroleum products continued in an upward trend.

The average cost of imported super petrol increased by 1.8 percent to $961.63 per metric tonne while that of diesel increased by 3.2 percent to $868.37 per metric tonne.

"When the impacts of the above changes are incorporated in the formula for calculating the maximum retail pump prices, the overall effect is an increase of between Sh2.77 and Sh4.35 per litre for the products under review from the prices published last month," Mr Mwirichia said.

Low-income households are expected to feel biggest impact of the increase with kerosene going up by Sh4.44 crossing the Sh80 mark. In Nairobi residents will pay Sh83.97 while in Mandera they will pay Sh95.51 for a litre of kerosene.

There has already been outrage from the public arguing that that they are yet to feel the effects of recent price controls in fuel pricing, since the government gazetted price controls in the sector.

The Kenya Private Sector Alliance does not support price controls arguing the scenario calls for a rethink of the fuel regulations saying they have had the adverse effect of impoverishing the rural poor.

The Consumer Federation of Kenya argues that the formula-based regulations have not cushioned consumers from the oil price fluctuations as had been expected.

In Lokichogio, residents will part with Sh111.17 for super petrol while in Migori they will pay Sh106.24 per litre.

The new prices take effect from March 15 to April 14 when the ERC next reviews fuel prices.

Oil marketers found in breach of the gazetted price face a fine of up to Sh1 million or the withdrawal of their operating licence or both.

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