Prices Of Basic Commodities To Rise After Rise In Fuel

Petrol prices in Kenya have increased by 12.8 percent to 100.5 shillings per liter from 89.1 shillings per liter previously.

Diesel prices have increased by 23.2 percent to 91.9 shillings per liter from 74.6 shillings per liter. Kerosene prices also increased by 4.8 percent to 65.5 shillings per liter from 62.5 shillings per liter, previously.

The changes in prices have been attributed to the increase in the average landing cost of imported super petrol by 12.6 percent to USD 279.6 per cubic meter in June 2020 from USD 248.2 per cubic meter in May 2020.

Landing costs for diesel increased by 32.2 percent to USD 302.2 per cubic meter in June 2020, from USD 228.6 per cubic meter in May 2020.

Landing costs for Kerosene, on the other hand, remained unchanged at USD 126.4 per cubic meter in June 2020. Kenyans, however, feel the government is not being genuine.

A 54.5 percent, increase in Free on Board (FOB) price of Murban crude oil lifted in June 2020 to USD 36.3 per barrel, from USD 23.5 per barrel in April 2020.

Also, the Kenya shilling appreciated by 0.2 percent against the dollar to close at 106.5 shillings in June 2020, from 106.7 shillings recorded in May 2020.

“The increase will not only affect the transport index, which carries a weighting of 8.7 percent in the total consumer price index but will have a trickle-down effect on the prices of other commodity baskets food prices due to higher transport costs,” said Cytonn.

During the week, S&P Global lowered Kenya’s outlook from stable to negative and affirmed the B+ long term and B short-term credit rating.

Key to note, Moody’s credit rating agency changed Kenya’s sovereign credit outlook to “negative”, from a previous outlook of “stable” and affirmed the B2 credit rating.

The agency pointed out that the negative outlook was a result of rising financial risks brought about by the country’s high debt and interest burden. Below is a summary of the credit rating and outlook revisions on Kenya so far.

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