A liter of Super Petrol has been increased by 7.58 shillings. That of Diesel has gone up by 7.94 shillings while Kerosene has increased by 12.97 shillings. This is the first major hike in three months.
Fuel prices play a major role in shifting the economy of this country. It is like a remote control that determines the price of various goods and services within the country. Shifting the prices either way often has an impact.
Whenever the price of fuel is “touched” by the Energy Petroleum and Regulatory Authority (EPRA), the consumer is often hit the most as makers of products and services move their burden of increased costs to them.
The first thing that is affected when prices of fuel are increased are the prices of common goods and services. This is because with increased fuel prices, the cost of production and transport moves up and people have to pay more.
As a result of increased prices of commodities, the inflation rate rises too. And now with the Kenyan shilling struggling against the US Dollar, the inflation rate for the month of September might be more than Kenyans can imagine.
Latest fuel prices
On Tuesday, the Energy Petroleum and Regulatory Authority (EPRA) shocked Kenyans with an increased fuel price. With the biting economy, Kenyans will have to dig deeper into their tattered pockets to pay more for fuel.
Kenyans who use public means of transport should expect a hike in fare (as has always been the case with the Matatu sector whenever fuel prices are increased.) The inflation for the month is also expected to rise.
In the recent fuel prices, a liter of Super Petrol has been increased by 7.58 shillings. That of Diesel has gone up by 7.94 shillings while Kerosene has increased by 12.97 shillings. This is the first major hike in three months.
“The average landed cost of imported Super Petrol decreased by 0.72 percent from 552.35 US Dollars per cubic meter in July to 548.36 US Dollars per cubic meter,” said EPRA in a statement.
At the same time, the landed cost of imported Diesel decreased by 4.81 percent from 514.25 US Dollars per Cubic Meter to 489.51 US Dollars per cubic meter. That of kerosene increased by 0.96 percent to 498.19 US Dollars per cubic meter.
Residents in Mombasa will pay 132.46 shillings per liter of Super Petrol, 113.36 shillings for Diesel, and 108.57 shillings for Kerosene. Nairobi, residents will have to part with 134.72 shillings for Super Petrol, 115.60 shillings for Diesel, and 110.82 shillings for Kerosene.
Those in Nakuru will pay 134.24 shillings for Super Petrol, 115.43 shillings for Diesel, and 110.67 shillings for Kerosene. Eldoret town will part with 135.13 shillings for Super Petrol, 116.31 shillings for Diesel, and 111.54 shillings for Kerosene.
“Over the same period, the mean monthly US Dollar to Kenyan shilling exchange rate depreciated by 1.1 percent from 108.26 shillings per US Dollar unit in July to 109.46 shillings per US Dollar unit in August,” said EPRA.
What should Kenyans expect?
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. For the month of August, for incidence, according to data by the Kenya National Bureau of Statistics (KNBS), prices of food and non-alcoholic beverages rose by 10.67 percent, transport by 7.93 percent, and housing, water, electricity, gas, and other fuels rose by 5.07 percent on a year0to-year.
The Consumer Price Index (CPI) in August increased by 0.23 percent from a revised index of 115.446 in July 2021 to 115.710 in August 2021. The month-to-month Food and Non-Alcoholic Drinks Index increased by 0.46 percent between July 2021 and August 2021. The Housing, Water, Electricity, Gas, and Other Fuels’ Index, increased by 0.32 percent between July 2021 and August 2021. This was mainly attributed to the increase in prices of cooking fuel and house rent in spite of the slight decrease in the price of electricity.
Transport Index decreased by 0.32 percent mainly due to decreases in bus fares of country and city public service vehicles as shown in Table 3. This is mainly as a result of the return to carrying of full capacity for public service vehicles in the month of August 2021.
At the same time, most manufacturing companies in Kenya use diesel-powered generators to generate energy and use roads for transport. The increase in fuel prices basically increases the cost of the product and the same cost is rolled over to consumers.