Commodity Watch

Fuel Prices: The Devil in Every Kenyan’s Business and Household

BY Juma · August 15, 2016 08:08 am

The Energy Regulatory Commission announced new fuel prices for the August/September period between 15^th August to 14^th September this year.

Hopes of Kenyans that this time the ERC would ease the burden of fuel prices which has been weighing heavily on their shoulders were crushed as the commission increased the prices for the fifth month running.

A liter of Super Petrol is now closing in to the 100 shilling mark as the cost of living continue to weigh heavily on the middle-class Kenyans.

Nairobi Residents will now have to part with 95.13 shillings per liter for Petrol, 84.51 shillings per liter for Diesel and 62.25 shillings per liter for Kerosene as compared to last month’s prices of 92.93 shillings per liter for Petrol, 83.24 shillings per liter for Diesel and 61.24 shillings per liter for Kerosene.

The graph below shows how Super Petrol in Nairobi has been increasing for the last seven months:

The graph below shows how the prices of Diesel have been changing in Nairobi since the month of February:

How has Kerosene been performing in terms of prices in Nairobi since February? See the graph below:

For the current fuel prices between 15^th August and 14^th September, the prices are as shown below:

What is the impact of the ever increasing fuel prices on the economy of Kenya?

Fuel is very important for the running of the economy. In Kenya, industries still rely on fuel for the running of their activities. The most common used fuel is Diesel which is used in the running of the machines. The increase in the prices of Diesel often affect the manufacturing sector as the first casualty. The increase always means an increase in the cost of manufacturing. Since these manufacturing companies are in business and they cannot afford to make losses, the whole cost is always transferred to the consumer who has to pay dearly for it.

The rise in inflation rate has always been affecting Kenyans. One of the drivers of the escalating inflation in Kenya is the increase in fuel prices. When fuel prices go up, prices of such important necessities as food (Unga in the case of Kenya) and others also go up. Inflation is usually as a result of the increasing prices of the commodities that people cannot do without (basic things).

There will be an increase in electricity bills. Kenya still generates her electricity from fuel powered generators and the increase in fuel prices will surely dictate on how Kenyans will receive their electricity bills at the end of the month.

For the transport sector it is obvious. Kenyans have always suffered whenever fuel prices are increased. Fuel prices in Kenya have often been used to dictate the amount of fare one pays and the prices have been increasing and never coming down.

Investors will start keeping off Kenya. This is because the business environment will become expensive in terms of operations. Kenya is likely to lose key investors to other countries where the environment of doing business is friendly.

Interest rates, increasing inflation, skyrocketing fuel prices, corruption… all these directed to a Kenyan?

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it. (020) 528 0222 or Email: info@sokodirectory.com

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