Fuel prices edge higher in latest review

March 14, 2012
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Motorists queue at a press station in Nairobi/ FILE
NAIROBI, Kenya, Mar 14 – Motorists will dig slightly deeper into their pockets over the next one month after petrol prices went up in the March review by the Energy Regulatory Commission (ERC).

In Nairobi, a litre of super petrol went up by 37 cents to retail at Sh111.69. Diesel, will however cost 17 cents less at Sh105.12 cents per litre while kerosene will now sell at Sh84.13 to reflect a 39 cents increase.

Owing to their proximity to the port, Mombasa motorists will pay Sh108. 44 per litre of super petrol which is the lowest rate while those in Mandera will pay the highest price at Sh124.21 for the commodity.

The ERC said in a statement on Wednesday that the new prices – which take effect from March 15 to April 14 – resulted from an increase in the actual cost of imported products and that of products refined locally.

“The Free on Board price of Murban crude oil lifted in February 2012 was posted at $120.45 per barrel, an increase of 5.47 percent from $114.20 per barrel in January 2012,” ERC Director General Eng Kaburu Mwirichia said in a statement.

This increase was however slightly offset by the positive impact of a strong shilling which was exchanging at an average of Sh83 to the dollar in February down from the Sh86 quoted in January.

Prices have been hovering around the Sh111 to Sh112 mark since January this year after a surprise Sh7 cut per litre was effected to reflect a dip in the cost of the products’ importation and a strong shilling.

The Sh7 cut followed another Sh5 drop announced in December 2011, which marked the first time in 12 months that a reduction of such a margin had been registered. Since then, motorists have only experienced marginal increments.

The reprieve however could be short lived given that crude and refined petroleum products in the international market have been on an upward trend in the last several months.

“This many have a negative impact in subsequent price reviews,” warned Mwirichia.

ERC has been regulating fuel prices since December 2010 in a bid to cushion consumers from the oil price fluctuations.

However, there has been consensus across the board that the fuel pricing regulations that cap the profit margin for marketers at Sh6 per litre have not largely been effectively.

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