CPI To Spike On Account Of Higher Fuel Prices

By Soko Directory Team / Published February 22, 2021 | 10:09 am

KEY POINTS

Petrol prices have increased by 7.6% to 115.3 shillings per liter, from 107.1 shillings per liter previously for the next 30 days to March 15, 2021.

Petrol prices have increased by 7.6 percent to 115.3 shillings per liter, from 107.1 shillings per liter previously for the next 30 days to March 15, 2021.

At the same time, diesel prices increased by 5.7 percent to 101.9 shillings per liter, from 96.4 shillings per liter. Kerosene prices also increased by 6.1 percent to 92.4 shillings per liter, from 87.1 shillings per liter.

EPRA says there was an increase in the average landed cost of imported super petrol by 20.9 percent to USD 391.2 per cubic meter in January 2021, from USD 323.5 per cubic meter in December 2020.

The average landed costs for diesel increased by 13.6 percent to USD 377.6 Per cubic meter, from USD 332.2 per cubic meter in December 2020.

Landed costs for kerosene also increased by 14.6 percent to USD 347.2 per cubic meter from USD 303.0 Per cubic meter in December 2020.

There was also an 11.5 percent increase in the Free on Board (FOB) price of Murban crude oil lifted in January 2021 to USD 55.3 per barrel, from USD 49.6 per barrel in December 2020.

During the period the fuel was being imported, the Kenyan shilling depreciated by 0.6 percent against the dollar to close at 109.9 shillings in January 2021, from 110.5 shillings in December 2020.

“We expect an increase in the transport and fuel index which carries a weighting of 8.7 in the total consumer price index (CPI) as a result of the increase in petrol and diesel prices at 7.6 and 5.7 percent respectively which will consequently result in an increase in the prices of other commodity baskets like food prices due to higher transport costs,” said Cytonn.

When fuel prices increase the way they have spiked this month, Kenyans are in for a tough ride as the price of vital commodities is expected to increase. This will in turn lead to an increase in the inflation rate. Kenyans should expect a high inflation rate for the month of February as compared to others.

The inflation rate in Kenya is determined by a number of factors, including and not limited to the cost of transport, price of foodstuffs such maize flour, cooking oil, as well as vegetables such as kales. The y/y inflation for the month of January 2021 increased to 5.7 percent from the 5.6 percent recorded in December 2020 according to stats released by the Kenya National Bureau of Statistics (KNBS).

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team