Kenya’s Energy and Petroleum Regulatory Authority (EPRA) on Friday kept the prices of kerosene diesel and petrol unchanged across all towns between January 15, 2022, and February 14, 2022.
Accordingly, diesel, petrol and kerosene prices in Nairobi will retail at KSh110.60, KSh129.72 and KSh103.54 respectively.
Pump prices have stabilized over the last two months, thanks to the deployment of the ‘fuel stabilization fund’ as well as the relative softness of prices in the international market.
EPRA said the average landed cost of imported super petrol in December declined by 4.11 per cent from USD 627.90 per cubic metre in November 2021. The average landed cost of diesel and kerosene decreased by 5.71 and 4.89 per cent over the same period.
The prices are inclusive of the 8 per cent Value Added Tax (VAT) in line with the provisions of the Finance Act 2018, the Tax Laws (Amendment) Act 2020 and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020.
Global fuel prices increased by 8.6 per cent in the first two weeks of January 2022 to USD 84.7, from USD 78.0 recorded at the end of 2021 attributable to increased demand coupled with supply constraints amidst economic uncertainty on the back of emerging COVID-19 variants.
Inflation eased for the third straight month to a 10-month low of 5.73 per cent in December, a touch below the November reading of 5.80 per cent. However, month on month, inflation accelerated to 0.91 per cent in December compared to 0.45 per cent a month earlier, driven by a surge in food prices.
“Going forward, we expect muted pressure on the inflation basket as fuel prices which are among the major contributors to Kenya’s headline inflation remain constant following the Fuel Subsidy program,” Cytonn Investments said in its weekly analysis.
“Despite the decrease in landed costs of fuel, we believe the stabilization under the fuel subsidy program by the National Treasury will be unsustainable given that the National Treasury will have to compensate the Oil Marketing companies and suppliers whose margins have been cut to zero from Kshs 6.3 per litre for super petrol, Kshs 5.5 per litre for diesel and Kshs 1.7 per litre for kerosene since November 2021 putting further strain on the program’s viability.”
The inflation rate is expected to remain within the government’s set range of 2.5 per cent – 7.5 per cent.