Business

Why Kenyans should brace for tougher economic times

Martin Mwita

Kenyans should brace for tough economic times ahead as petroleum prices threaten to fuel the cost of living, with several households already feeling the heat of the ravaging drought being experienced in most parts of the country.

In yet another upward adjustment, Energy Regulatory Commission (ERC) yesterday announced higher prices for petroleum products for the second month in a row after a short-lived relief in February.

Crucial products

The regulator increased prices of super petrol, diesel and kerosene by Sh5.25, Sh5.52 and Sh 2.76 per litre respectively, a move that will see consumers dig deeper into their pockets to access these crucial products.

A litre of super petrol, mostly used by motorists, will now retail at Sh106.60 in Nairobi up from Sh101.35. Diesel which is heavily used in the transport sector and driving farm machinery and equipment will now sell at Sh102.13 per litre , a 5.7 per cent jump from Sh96.61 which it has been trading at for the last one month.

Poor households in Nairobi who depend on kerosene for cooking and lighting have also not been spared in the latest review, as the product is now priced at Sh102.22 a litre up from Sh99.46. In Mombasa, motorists will pay Sh103.98 for a litre of petrol, Sh99.51 for diesel and Sh99.60 for kerosene.  Mandera residents will bear the heaviest costs at Sh119.47 for a litre of petrol, Sh114.99 for diesel and Sh115.08. This is the second month of fuel price hikes after favourable prices in February, when a litre of petrol dropped by Sh3.31 to trade at Sh100.90 in Nairobi, last seen in March last year. The cost of a litre of diesel fell by Sh6.26  to retail at Sh95.96  while kerosene retailed  at Sh96.50 per litre after falling by Sh6.28.

Average cost

The regulator has pegged the price hike to the “average cost of imported refined petroleum products”.

“The changes in this month’s prices have been as a consequence of the average landed cost of imported super petrol increasing by 9.14 per cent from $ 568.55 (Sh57,423)  per tonne in February 2019 to $ 620.54 (Sh62,674) per tonne in March 2019,” Director General Pavel Oimeke said in the price review yesterday.

According to ERC, import costs on diesel increased by 11.19 per cent  from $ 561.64(Sh56,726)  per tonne to $624.51(Sh63,075) per tonne while kerosene increased by 1.88 per cent from $650.29( Sh65,679) per tonne to $662.55(Sh66,917) per tonne.

“The pump prices are inclusive of eight per cent Value Added Tax (VAT) in line with the provisions of the Finance Act 2018,” Oimeke said in a statement.

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