ERC Director General Eng. Kaburu Mwirichia said provisional calculations showed Super petrol prices could down by between Sh3.50 and Sh4.50 while kerosene and diesel could get cheaper by between Sh6 and Sh7.
Mwirichia said international prices of crude oil and refined products as well as the average mean exchange rate – the two main factors driving the retail prices of petroleum in the country – were on a positive trend during the period November to December 2011
“Taking these trends into account, the next price review due on January 15 is expected to result in the reduction of pump prices. The exact reductions will be announced after the calculations are finalized,” he said.
The Free On Board price of Murban crude oil lifted in December was posted at US$111.655 per barrel which was 2.3 percent lower than the price of US$114.35 posted in November 2011.
Over the same period the average Free On Board prices of Super petrol, Kerosene and Diesel reduced by 1.5 percent, 4.1 percent and 3.7 percent respectively.
The average mean exchange rate improved by 7.4 percent from Sh93.64 to the dollar in November to Sh86.66 per dollar in December 2011.
There has been a steady drop of fuel prices in the last one month following the strengthening of the shilling against the major international currencies.
During the December 2011 review, ERC reduced petrol prices in Nairobi by Sh5.07, diesel by Sh3.33 while kerosene prices dropped by Sh4.13 per litre.
Last year, there was an erratic trend in the price of crude and imported refined petroleum products in the international markets coupled with volatile performance of key economies of the world, factors which also affected the local petroleum prices.
ERC is mandated to regulate fuel prices in accordance with Legal Notice No.196, the Energy (Petroleum Pricing) Regulations, 2010.
Its role in the industry is to protect consumers against the abuse of market power, ensure cost recovery and financial viability of sector players, enforce technical standards and to implement government policy.