Kenya's Political Uncertainties to Further Push Up Fuel Prices, Report

Kenya’s Political Uncertainties to Push Up Fuel Prices More, Report

By Lynnet Okumu / Published June 24, 2022 | 12:08 pm

KEY POINTS

Ministry of Petroleum and Mining Principal Secretary, Mr Andrew Kamau, stated that Kenya has managed to keep gas prices low compared to other countries.

For instance, the government’s plan to raise gas to 185 shillings per litre was prohibited but instead, it increased by only 5 shillings compared to other countries, which have gone up to 200 shillings per litre.

KEY TAKEAWAYS

Even with the effects of the pandemic, the Kenyan economy remained resilient with significant growth in various sectors such as manufacturing, agriculture, transport, and communication.

According to a report released by the Petroleum Institute of East Africa (PIEA), the current political uncertainty is one main issue likely to affect the petroleum industry resulting in high fuel prices in the coming days.

Ministry of Petroleum and Mining Principal Secretary, Mr Andrew Kamau, stated that Kenya has managed to keep gas prices low compared to other countries.

The Country’s economy has deflated due to the Russia-Ukraine war, according to NCBA Managing Director Mr John Gachora.

“As Europe turns to the United States and the Middle East for oil supply, the changes will result in a high insurance shaping, financing, and compliance cost for players across the value chain,” Gachora said.

Gachora lamented the price of American Dollars tripling in value and its demand, indicating a significant rise as traders who used to ask for 100,000 dollars now ask for 300,000 dollars.

Since the Russian invasion of Ukraine, free trade has been rapidly fading, a matter that has primarily affected African Countries such as Kenya.

The PIEA report, however, indicates that even with the effects of the pandemic, the Kenyan economy remained resilient with significant growth in various sectors such as manufacturing, agriculture, transport, and communication.

The report further explains that retail outlets grew from 48.6 percent in 2020 to 49 percent in 2021; resellers dropped from 26.5 percent in 2020 to 23.9 percent in 2021.

The Energy and Petroleum Regulatory Authority (EPRA) increased fuel prices by 9 shillings per litre, pushing the cost of Super Petrol, Diesel, and Kerosene to 159.12, 140, and 127 shillings, respectively in Nairobi.

The price is even more likely to surge if the national Treasury removes the subsidy, covering 25.56 shillings for super petrol, 48.19 shillings for diesel, and 42.43 shillings for kerosene. This will see the cost of the aforementioned commodities hit 184.68 shillings per litre, 188.19 shillings, and 170 shillings, respectively.