Fuel costs down amid shortage in Nairobi

December 14, 2014 12:46 pm
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The reduction was announced even as motorists in Nairobi experienced a major fuel shortage attributed to the anticipation of the new prices by the dealers. Photo/FILE.
The reduction was announced even as motorists in Nairobi experienced a major fuel shortage attributed to the anticipation of the new prices by the dealers. Photo/FILE.
NAIROBI, Kenya Dec 14 – Fuel costs have reduced drastically in new prices released on Sunday by the Energy Regulatory Commission (ERC).

In Nairobi, Super petrol will retail at Sh102.01 after reducing by Sh4.79, while Diesel has gone down by Sh3.67 to retail at Sh90.85. Kerosene will now retail at Sh71.37.

The new prices which take effect Monday will be reviewed in mid January 2015.

The reduction was announced even as motorists in Nairobi experienced a major fuel shortage attributed to the anticipation of the new prices by the dealers.

ERC Director General Joseph Ng’ang’a said the price reductions are a reflection of the reduction in the price crude oil in the international market.

Ng’ang’a however, says the reduction has not been reflected fully in the Kenyan market due to the open tendering system the country uses to source its fuel. “So it takes about a month for the impact to be felt,” he said.

The Kenyan shilling performing poorly against the dollar, he said, was another factor that stood in the way of greater reduction and the fact that Kenya does not import crude oil.

“Only 60 percent of the cost of production is affected by international prices. The balance of 40 percent consists of local taxes, levies, amongst other charges, which have remained constant,” Ng’ang’a told a news conference on Sunday.

The ERC has also announced a 60 percent discount in electricity tariffs for the Nairobi County government between 6pm and 6am to enable authorities implement the street lighting project aimed at making the city a 24-hour economy.

The county government will therefore pay 4.36 Cents per unit as opposed to the gazetted 11.25 cents.
“This just applies at night. If they choose to leave the street lights on during the day, they should know the normal rate applies,” Ng’ang’a cautioned.

Ng’ang’a also assured Kenyans that the reduction in the cost of electricity is sustainable given the reduced fuel costs and investments in geo-thermal energy.

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